Related papers: Diverse Beliefs
General equilibrium is the dominant theoretical framework for economic policy analysis at the level of the whole economy. In practice, general equilibrium treats economies as being always in equilibrium, albeit in a sequence of equilibria…
In market modeling, one often treats buyers as a homogeneous group. In this paper we consider buyers with heterogeneous preferences and products available in many variants. Such a framework allows us to successfully model various market…
In this paper I discuss truthful equilibria in common agency models. Specifically, I provide general conditions under which truthful equilibria are plausible, easy to calculate and efficient. These conditions generalize similar results in…
We present a general logical framework for reasoning about agents' cognitive attitudes of both epistemic type and motivational type. We show that it allows us to express a variety of relevant concepts for qualitative decision theory…
We study competitive equilibrium in the canonical Fisher market model, but with indivisible goods. In this model, every agent has a budget of artificial currency with which to purchase bundles of goods. Equilibrium prices match between…
Traditional logic-based belief revision research focuses on designing rules to constrain the behavior of revision operators. Frameworks have been proposed to characterize iterated revision rules, but they are often too loose, leading to…
When human operators of cyber-physical systems encounter surprising behavior, they often consider multiple hypotheses that might explain it. In some cases, taking information-gathering actions such as additional measurements or control…
Following a long tradition of physicists who have noticed that the Ising model provides a general background to build realistic models of social interactions, we study a model of financial price dynamics resulting from the collective…
Opinions and beliefs determine the evolution of social systems. This is of particular interest in finance, as the increasing complexity of financial systems is coupled with information overload. Opinion formation, therefore, is not always…
By elaborating on the notion of linear belief functions (Dempster 1990; Liu 1996), we propose an elementary approach to knowledge representation for expert systems using linear belief functions. We show how to use basic matrices to…
The article develops a general equilibrium model where power relations are central in the determination of unemployment, profitability, and income distribution. The paper contributes to the market forces versus institutions debate by…
A researcher observes a finite sequence of choices made by multiple agents in a binary-state environment. Agents maximize expected utilities that depend on their chosen alternative and the unknown underlying state. Agents learn about the…
Motivated by empirical research on bias and opinion formation, we formulate a multidimensional nonlinear opinion-dynamical model where agents have individual biases, which are fixed, as well as opinions, which evolve. The dimensions…
We extend the indirect evolutionary approach to the selection of (possibly misspecified) models. Agents with different models match in pairs to play a stage game, where models define feasible beliefs about game parameters and about others'…
Discrete choice models (DCM) are widely employed in travel demand analysis as a powerful theoretical econometric framework for understanding and predicting choice behaviors. DCMs are formed as random utility models (RUM), with their key…
The price-bubble and crash process formation is theoretically investigated in a two-asset equilibrium model. Sufficient and necessary conditions are derived for the existence of average equilibrium price dynamics of different agent-based…
This paper develops a theory of competitive equilibrium with indivisible goods based entirely on economic conditions on demand. The key idea is to analyze complementarity and substitutability between bundles of goods, rather than merely…
Belief systems are often treated as globally consistent sets of propositions or as scalar-valued probability distributions. Such representations tend to obscure the internal structure of belief, conflate external credibility with internal…
We study the stability of posterior predictive inferences to the specification of the likelihood model and perturbations of the data generating process. In modern big data analyses, useful broad structural judgements may be elicited from…
Many economic theory models incorporate finiteness assumptions that, while introduced for simplicity, play a real role in the analysis. We provide a principled framework for scaling results from such models by removing these finiteness…