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Thursday, July 23, 2020 | History

1 edition of Ex ante versus interim rationality and the existence of bubbles found in the catalog.

Ex ante versus interim rationality and the existence of bubbles

Sugato Bhattacharyya

Ex ante versus interim rationality and the existence of bubbles

by Sugato Bhattacharyya

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Published by Institute for Economic Research, Queen"s University in Kingston, Ont .
Written in English


Edition Notes

StatementSugato Bhattacharyya, Barton L. Lipman
SeriesQueen"s University discussion paper -- #851, Discussion paper (Queen"s University (Kingston, Ont.). Institute for Economic Research) -- no. 851.
ContributionsLipman, Barton L., Queen"s University (Kingston, Ont.). Institute for Economic Research
The Physical Object
Pagination45 p. ;
Number of Pages45
ID Numbers
Open LibraryOL26556768M

The political sphere, along with every other dimension of contemporary existence, is submitted to an economic rationality, or put the other way around, not only is the human being configured exhaustively as homo oeconomicus, all dimensions of human life are cast in terms of a market rationality neo-liberalism produces rational actors and. Table 2 reports summary statistics for the cross-sectional distribution of sample firms’ stock returns in October and the surrounding three years. Stock prices dropped on average % in October , when more than 96% of the firms experienced negative stock returns. October mean returns are significantly more negative than returns in August, September, Cited by:

Which of the following examples are used as evidence favoring the bounded rationality assumption? A. When purchasing electric appliances such as refrigerators, people sometimes buy the lowest-priced, energy-inefficient models even though the price savings often fail to compensate for higher future energy costs. rational choice theory a relatively formal approach to sociological and social science theorizing (e.g. drawing upon the THEORY OF GAMES notion of STRATEGIC INTERACTION and ECONOMICS), in which it is maintained that social life is principally capable of explanation as the outcome of the ‘rational choices’ of individual actors. ‘When faced with several courses of .

Define economics. Explain briefly how the economic way of thinking—in terms of rational, self-interested people responding to incentives—relates to each of the following situations. (See pages 2, 6–7.) a. A student deciding whether to purchase a text- book for a particular class. 1. Briefly summarize Simon’s principle of bounded rationality as it applies to satisficing. 2. The terms consideration and initiating structure emerged from the Ohio State studies. Explain what these terms mean in relationship to leadership. 3. Explain the difference between positive and negative reinforcement. 4.


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Ex ante versus interim rationality and the existence of bubbles by Sugato Bhattacharyya Download PDF EPUB FB2

Tirole () is commonly interpreted as proving that bubbles are impossible with finitely many rational traders with common priors. We study a simple variation of his model in which bubbles can occur, even though traders have common priors and common knowledge that the asset has no fundamental value.

In equilibrium, agents purchase the asset at successively Cited by: Bhattacharyya, Sugato & Lipman, Barton L, "Ex ante versus Interim Rationality and the Existence of Bubbles," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol.

6(3), pagesNovember. "Ex Ante versus Interim Rationality and the Existence of Bubbles," with Sugato Bhattacharyya, Economic Theory, 6, Number 4,"Robust Inference in Communication Games with Partial Provability," with Duane J.

Seppi, Journal of Economic Theory, 66, August Volume 6, Issue 3, ISSN: (Print) (Online) Ex ante versus interim rationality and the existence of bubbles. Research Articles. Generic existence of competitive equilibria when the asset market is incomplete: A symmetric argument. Herakles M.

Polemarchakis, Paolo Siconolfi Pages Exposita Notes. A governmental decision is "ex ante efficient" if it maximizes the satisfaction of everyone's preferences ex ante, relative to other possible decisions.

Equivalently, each affected person would be rational to approve the decision, given her preferences and beliefs at the time of the choice.

Does this matter, morally speaking. Do governmental officials - legislators, judges, regulators Cited by: 1. This paper presents and analyzes a bargaining model of bilateral monopoly under uncertainty. Under the bargaining rule proposed, the buyer and the seller each submit sealed offers that determine whether the good in question is sold and the transfer price.

The Nash equilibrium solution of this bargaining game implies an offer strategy of each party that is monotonic in its Cited by: Quantifying Bounded Rationality: Managerial Behaviour and the Smith Predictor Article in International Journal of Systems Science 34(6) June with 9.

Belief consistency and trade consistency. Ex ante versus interim rationality and the existence of bubbles which enable us to construct equilibrium bubbles this way.

First, Tirole requires. The bounded rationality phenomenon challenges traditional rationalist perspectives and suggests that the rationality of actual human and company behavior is always partial, or ‘bounded’ by human limitations.

This management concept recognizes that decision making takes place within an environment of incomplete information and uncertainty. Ex Post and Ex Ante Identification of Bubbles Assuming asset bubbles exist and can be identified, it may be difficult for regulators or tribunals to detect them as they are going on, () rather than after the fact.

I use the efficient markets hypothesis in my research and in my blog. Once I started looking at the world through the EMH lens, I found it much easier to understand the relationship between policy and the financial marketsparticularly in my research on the Depression.

Here I'd like to do three things; indicate why I believe markets are more efficient. Bounded rationality phenomena can be categorised according to the hypotheses that they violate. Examples of behavioural phenomena that seem to violate EUT include Allais’ Paradox and the preference reversal phenomenon.

Allais’ idea was to find two pair-wise choices such that EUT would predict a specific choice pattern, and then check the File Size: KB. Bounded rationality, the notion that a behaviour can violate a rational precept or fail to conform to a norm of ideal rationality but nevertheless be consistent with the pursuit of an appropriate set of goals or objectives.

This definition is, of course, not entirely satisfactory, in that it specifies neither the precept being violated nor conditions under which a set of goals may be. Williamson’s work are more than efficient (i.e., second-best) ex ante allocations of property rights (as in Grossman and Hart ; Hart and Moore ); they are mechanisms for ex post adaptation and conflict resolution.

Williamson’s works are replete with references to Simon. Identify possible future conditions (states of nature), list possible alternatives, determine payoff for each alternative under every possible future condition, If possible, estimate the likelihood of each possible future condition, evaluate each alternative according to.

I could talk about the evils of rationality for hours and hours. In fact I’m writing a whole book on it because it’s the #1 issue that holds most people back in modern society. Because the entire narrative that society feeds us is that rationality is the best, and nothing is better. This narrative is not different from religion.

bounded rationality. idea that in decision-making, rationality of individuals is limited by the information they have, the cognitive limitations of their minds, and the finite amount of time they have to make a decision.

Why is rationality limited or bounded. We have limited info. It is a form of bounded rationality for living rather than an expression of a fully developed life plan. So we might say that Simon's "philosophy of living" is entirely consistent with his theory of bounded rationality.

There are a few real surprises in the book -- for example, a conversation between Simon and Jorge Luis Borges in Argentina in. Bounded Rationality The theory that humans attempt to make rational decisions, but their ability to do so is limited by knowledge, ability to know, inadequate time to consider and other factors.

Bounded rationality may explain situations like panic buying, in which investors continue to buy a security long after it ceases to be rational to do so. The book begins by demonstrating how to model asymmetric information and higher-order knowledge. It then contrasts competitive and strategic equilibrium concepts under asymmetric information.

It also illustrates the dependence of information efficiency and allocative efficiency on the security structure and the linkage between both efficiency. Formally, the orthodox rational agent's “Olympian” choices, as Simon has called orthodox rational choice, are made in a static framework.

However, a formalization of consistent choice, underpinned by computability, suggests by, satisficing in a boundedly rational framework is not only more general than the model of &#;Olympian&#; rationality, it is also Cited by: One of the readers of “Jeux et Stratégie” was Hervé Moulin.

3 He recognized that Ledoux’s game is an example of successive elimination of dominated strategies. In chapter 4 of the second edition of his game theory book, entitled “sophisticated and perfect equilibria”, Moulin included an adaptation of Ledoux’s game: Choose a number between 1 and where the winner is the Cited by: Rationality as a Constitutive Ideal Michael Rescorla Abstract: A striking thesis lies at the core of Davidson’s philosophy: when we attribute intentional content to another creature’s mental states and speech acts, we must treat the creature as largely conforming to our own rational norms.

I will discuss how this thesis informsFile Size: KB.