On Chaotic Consistent Expectations Equilibria
-
J. A. Jungeilges
Abstract
The notion of c̱onsistent e̱xpectations e̱quilibria (CEE) as propagated by Hommes/Sorger (1998) is reviewed. Focusing on their example of a chaotic CEE constructed in the context of a cobweb model, it is argued that such an equilibrium is a temporary one. Assuming that an agent-modeled as an individual, versatile in applying the basic tools of linear time-series econometrics-has learned the CEE, I analyze the duration of the time period over which the agent maintains her/his beliefs concerning the perceived law of motion (AR(1)). The analysis based on numerical simulations indicates that the use of techniques rooted in the linear paradigm is sufficient to generate convincing evidence against the underlying perceived law of motion.
© 2007 by Lucius & Lucius, Stuttgart
Articles in the same Issue
- Aspiration Balancing Agreements: A New Axiomatic Approach to Bounded Rationality in Negotiations
- Choices, Norms and Preference Revelation
- Indifferences and Domain Restrictions
- Non-deteriorating Choice Without Full Transitivity
- The Shortage of Human Organs: Causes, Consequences and Remedies
- Multivariate Lorenz Majorization and Heterogeneity Measures: An Axiomatic Approach
- Living Standards and Capabilities: Equal Values or Equal Sets?
- Distributing Indivisible Goods Fairly: Evidence from a Questionnaire Study
- A Critical Discussion of the Characteristic Properties of List PR and FPTP Systems
- On Chaotic Consistent Expectations Equilibria
- On Measuring Personal Connections and the Extent of Social Networks
- Instances of Indeterminacy
- Norm-Constrained Choices
Articles in the same Issue
- Aspiration Balancing Agreements: A New Axiomatic Approach to Bounded Rationality in Negotiations
- Choices, Norms and Preference Revelation
- Indifferences and Domain Restrictions
- Non-deteriorating Choice Without Full Transitivity
- The Shortage of Human Organs: Causes, Consequences and Remedies
- Multivariate Lorenz Majorization and Heterogeneity Measures: An Axiomatic Approach
- Living Standards and Capabilities: Equal Values or Equal Sets?
- Distributing Indivisible Goods Fairly: Evidence from a Questionnaire Study
- A Critical Discussion of the Characteristic Properties of List PR and FPTP Systems
- On Chaotic Consistent Expectations Equilibria
- On Measuring Personal Connections and the Extent of Social Networks
- Instances of Indeterminacy
- Norm-Constrained Choices
