This essay links some of my own work on expectations, learning and bounded rationality to the inspiring ideas of Jean-Michel Grandmont. In particular, my work on consistent expectations and behavioral learning equilibria may be seen as formalizations of JMG's ideas of self-fulfilling mistakes. Some of our learning-to-forecast laboratory experiments with human subjects have also been strongly influenced by JMG's ideas. Key features of self-fulfilling mistakes are multiple equilibria, excess volatility and persistence amplification.
# 17-018/II (2017-01-30)
- Cars Hommes, University of Amsterdam, The Netherlands
- expectations, learning, bounded rationality, chaos, almost self-fulfilling equilibria, laboratory experiments
- JEL codes:
- D84, D83, E32, C92