Expectations With Endogenous Information Acquisition PDF Download
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Author | : Andreas Fuster |
Publisher | : |
Total Pages | : 0 |
Release | : 2018 |
Genre | : |
ISBN | : |
Download Expectations with Endogenous Information Acquisition Book in PDF, ePub and Kindle
Information frictions play an important role in many theories of expectation formation. We use a survey experiment to generate direct evidence on how people select, acquire and process information. Participants can buy different information signals that could help them forecast future national home prices. We elicit their willingness to pay for information, and introduce exogenous variation in the cost of information. We find that participants put substantial value on their preferred signal and, when acquired, incorporate the signal in their beliefs. However, they disagree on which signal to buy. As a result, making information cheaper does not decrease the cross-sectional dispersion of expectations. We further document that numeracy and the revealed "taste" for accurate expectations are important correlates of heterogeneity in all stages of the process. We provide a model with costly acquisition and processing of information, which can match most of our empirical results.
Author | : Andreas Fuster |
Publisher | : |
Total Pages | : 45 |
Release | : 2018 |
Genre | : |
ISBN | : |
Download Expectations with Endogenous Information Acquisiton Book in PDF, ePub and Kindle
Information frictions play an important role in many theories of expectation formation and macroeconomic fluctuations. We use a survey experiment to generate direct evidence on how people acquire and process information, in the context of national home price expectations. We let consumers buy different pieces of information that could be relevant for the formation of their expectations about the future median national home price. We use an incentive-compatible mechanism to elicit their maximum willingness to pay. We also introduce exogenous variation in the value of information by randomly assigning individuals to rewards for the ex-post accuracy of their expectations. Consistent with rational inattention, individuals are willing to pay more for information when they stand to gain more from it. However, underscoring the importance of limits on information processing capacity, individuals disagree on which signal they prefer to buy. Individuals with lower education and financial numeracy are less likely to demand information that has ex-ante higher predictive power, independently of stakes. As a result, lowering the information acquisition cost does not decrease the cross-sectional dispersion of expectations. Our findings have implications for models of expectation formation and for the design of information interventions.
Author | : Gabriel Desgranges |
Publisher | : |
Total Pages | : 29 |
Release | : 2004 |
Genre | : |
ISBN | : |
Download Strongly Rational Expectations Equilibria with Endogenous Acquisition of Information Book in PDF, ePub and Kindle
Author | : Ricardo Selmick Grinspun |
Publisher | : |
Total Pages | : 193 |
Release | : 1990 |
Genre | : |
ISBN | : |
Download INFORMATION ACQUISITION AND FORMATION OF EXPECTATIONS. Book in PDF, ePub and Kindle
This dissertation deals with issues of learning and convergence to rational expectations (RE).
Author | : John W. Galbraith |
Publisher | : |
Total Pages | : 224 |
Release | : 1985 |
Genre | : Economic forecasting |
ISBN | : |
Download Endogenous Information in a Model of Expectations Formation Book in PDF, ePub and Kindle
Author | : Ruediger Bachmann |
Publisher | : Elsevier |
Total Pages | : 876 |
Release | : 2022-11-04 |
Genre | : Business & Economics |
ISBN | : 0128234768 |
Download Handbook of Economic Expectations Book in PDF, ePub and Kindle
Handbook of Economic Expectations discusses the state-of-the-art in the collection, study and use of expectations data in economics, including the modelling of expectations formation and updating, as well as open questions and directions for future research. The book spans a broad range of fields, approaches and applications using data on subjective expectations that allows us to make progress on fundamental questions around the formation and updating of expectations by economic agents and their information sets. The information included will help us study heterogeneity and potential biases in expectations and analyze impacts on behavior and decision-making under uncertainty. Combines information about the creation of economic expectations and their theories, applications and likely futures Provides a comprehensive summary of economics expectations literature Explores empirical and theoretical dimensions of expectations and their relevance to a wide array of subfields in economics
Author | : Christopher Torr |
Publisher | : Routledge |
Total Pages | : 186 |
Release | : 2019-03-06 |
Genre | : Political Science |
ISBN | : 0429718527 |
Download Equilibrium, Expectations, And Information Book in PDF, ePub and Kindle
This book attempts to elucidate the views of Keynes's General Theory as far as equilibrium, expectations and information are concerned, and compares them with those of modern classical economists of the Chicago and Ricardian persuasion.
Author | : Yan Han |
Publisher | : Bridge 21 Publications |
Total Pages | : 152 |
Release | : 2022-10-14 |
Genre | : Business & Economics |
ISBN | : 1626430888 |
Download The Behavior of Financial Markets under Rational Expectations Book in PDF, ePub and Kindle
The financial markets have become more and more important in modern society. The behavior of the financial markets, and its impacts on our society, relies crucially on the behavior of market participants, aka the investors of different types. Although descriptions of the financial markets on the macro level have caught great attentions of investors, regulators, and the ordinary people, how the market participants interact with each other in the financial market may provide deeper insights on how and why the financial markets behave. This book tries to supply as much research on the micro level of financial market behavior as possible to the readers. The author has been doing financial research, especially on the micro level, during the past two decades. The academic research on this broad area has undergone a rapid growth, with new results, methods, theories, and even paradigms, emerging and burgeoning almost every year. As a financial researcher in one of Chinas top universities, the author has kept monitoring, digesting, and synthesizing the research articles in the area. This book is the outcome of this decades-long routine research work of the author. The book covers the fundamental economic theories of how different investors receive and interpret information. The empirical results of investors behavior are also discussed in depth. The book also shows the basic academic techniques of modeling the investors behavior.
Author | : Jonathan Berk |
Publisher | : |
Total Pages | : |
Release | : 2013 |
Genre | : |
ISBN | : |
Download The Acquisition of Information in a Dynamic Market Book in PDF, ePub and Kindle
This paper models the process of acquiring information in an intertemporal rational expectations framework. I find that when agents have control over the process of resolving uncertainty, the rational expectations equilibrium can differ dramatically from the equilibrium where agents are exogenously endowed with private information. I demonstrate that rational expectations equilibria do not generally exist in intertemporal economies in which the information acquisition process is endogenous. I also show that when intertemporal fully revealing rational expectations equilibria do exist, agents can pay a strictly positive amount for information. Finally, I show that it is possible for an equilibrium to exist in which agents choose to purchase information even if all agents, including the agents who purchased the information, are made strictly worse off by the purchase.
Author | : Xavier Vives |
Publisher | : Princeton University Press |
Total Pages | : 422 |
Release | : 2010-01-25 |
Genre | : Business & Economics |
ISBN | : 140082950X |
Download Information and Learning in Markets Book in PDF, ePub and Kindle
The ways financial analysts, traders, and other specialists use information and learn from each other are of fundamental importance to understanding how markets work and prices are set. This graduate-level textbook analyzes how markets aggregate information and examines the impacts of specific market arrangements--or microstructure--on the aggregation process and overall performance of financial markets. Xavier Vives bridges the gap between the two primary views of markets--informational efficiency and herding--and uses a coherent game-theoretic framework to bring together the latest results from the rational expectations and herding literatures. Vives emphasizes the consequences of market interaction and social learning for informational and economic efficiency. He looks closely at information aggregation mechanisms, progressing from simple to complex environments: from static to dynamic models; from competitive to strategic agents; and from simple market strategies such as noncontingent orders or quantities to complex ones like price contingent orders or demand schedules. Vives finds that contending theories like informational efficiency and herding build on the same principles of Bayesian decision making and that "irrational" agents are not needed to explain herding behavior, booms, and crashes. As this book shows, the microstructure of a market is the crucial factor in the informational efficiency of prices. Provides the most complete analysis of the ways markets aggregate information Bridges the gap between the rational expectations and herding literatures Includes exercises with solutions Serves both as a graduate textbook and a resource for researchers, including financial analysts