Modelling the economic interaction of agents with diverse abilities to recognise equilibrium patterns

Michele Piccione and Ariel Rubinstein ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We model differences among agents in their ability to recognise temporal patterns of prices. Using the concept of DeBruijin sequences in two dynamic models of markets, we demonstrate the existence of equilibria in which prices fluctuate in a pattern that is independent of the fundamentals and that can be recognised only by the more competent agents.

Keywords: DeBruijin; price fluctuations; sunspots; bounded rationality; bounded recall. (search for similar items in EconPapers)
JEL-codes: C7 D4 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2002-10
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http://eprints.lse.ac.uk/2061/ Open access version. (application/pdf)

Related works:
Working Paper: Modeling the Economic Interaction of Agents with Diverse Abilities to Recognize Equilibrium Patterns (2010)
Journal Article: Modeling the Economic Interaction of Agents With Diverse Abilities to Recognize Equilibrium Patterns (2003)
Working Paper: Modelling the Economic Interaction of Agents with Diverse Abilities to Recognise Equilibrium Patterns (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:2061

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