Related papers: Non-Equivalent Beliefs and Subjective Equilibrium …
The use of equilibrium models in economics springs from the desire for parsimonious models of economic phenomena that take human reasoning into account. This approach has been the cornerstone of modern economic theory. We explain why this…
This paper is about a new model of opinion dynamics with opinion-dependent connectivity. We assume that agents update their opinions asynchronously and that each agent's new opinion depends on the opinions of the $k$ agents that are closest…
We study asset price bubbles in market models with proportional transaction costs $\lambda\in (0,1)$ and finite time horizon $T$ in the setting of [49]. By following [28], we define the fundamental value $F$ of a risky asset $S$ as the…
We define a financial bubble as a period of unsustainable growth, when the price of an asset increases ever more quickly, in a series of accelerating phases of corrections and rebounds. More technically, during a bubble phase, the price…
This paper introduces a new model of continuous opinion dynamics with random noise. The model belongs to the broad class of so called bounded confidence models. It differs from other popular bounded confidence models by the update rule,…
All-pay auctions, a common mechanism for various human and agent interactions, suffers, like many other mechanisms, from the possibility of players' failure to participate in the auction. We model such failures, and fully characterize…
We study a model for social influence in which the agents' opinion is a continuous variable [G. Weisbuch et al., Complexity \textbf{7}, 2, 55 (2002)]. The convergent opinion adjustment process takes place as a result of random binary…
We propose a game-theoretic framework that incorporates both incomplete information and general ambiguity attitudes on factors external to all players. Our starting point is players' preferences on payoff-distribution vectors, essentially…
We consider a large class of social learning models in which a group of agents face uncertainty regarding a state of the world, share the same utility function, observe private signals, and interact in a general dynamic setting. We…
We formalize the argument that political disagreements can be traced to a "clash of narratives". Drawing on the "Bayesian Networks" literature, we model a narrative as a causal model that maps actions into consequences, weaving a selection…
In gas evolving electrolysis, bubbles grow at electrodes due to a diffusive influx from oversaturation generated locally in the electrolyte by the electrode reaction. When considering electrodes of micrometer-size resembling catalytic…
Agent-based models help explain stock price dynamics as emergent phenomena driven by interacting investors. In this modeling tradition, investor behavior has typically been captured by two distinct mechanisms -- learning and heterogeneous…
We seek to deepen understanding of the micro-foundations of institutionalization while contributing to a sociological theory of markets by investigating the puzzle of price bubbles in financial markets. We find that such markets, despite…
For a class of stochastic dynamical models of exchange economies that we call ``fully connected Cobb-Douglas'', the paper proves convergence of the probability distribution to an equilibrium, in total variation metric as time goes to…
We consider a nonlinear kinetic equation of Boltzmann type which takes into account the influence of conviction during the formation of opinion in a system of agents which interact through the binary exchanges introduced in [G. Toscani,…
The existence of the pricing kernel is shown to imply the existence of an ambient information process that generates market filtration. This information process consists of a signal component concerning the value of the random variable X…
Socio-psychological studies have identified a common phenomenon where an individual's public actions do not necessarily coincide with their private opinions, yet most existing models fail to capture the dynamic interplay between these two…
As insurers increasingly behave like financial intermediaries and actively participate in capital markets, understanding the dependence structure between insurance and financial risks becomes crucial for insurers' operations. This paper…
We study equilibria of markets with $m$ heterogeneous indivisible goods and $n$ consumers with combinatorial preferences. It is well known that a competitive equilibrium is not guaranteed to exist when valuations are not gross substitutes.…
The stability of multi-electron bubbles in liquid helium is investigated theoretically. We find that multi-electron bubbles are unstable against fission whenever the pressure is positive. It is shown that for moving bubbles the Bernoulli…