Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
10437732 | Journal of Economic Behavior & Organization | 2005 | 24 Pages |
Abstract
We study expectations coordination on a deterministic cycle of period 2 by an eductive approach in which agents are concerned with forecasting the forecasts of others. This approach is grounded in some Common Knowledge assumptions. We use this approach to discuss the problem of equilibrium selection between the stationary state and a cycle of period 2. We prove that locally eductively stable cycles of period 2 can exist if agents have stationary beliefs.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Giorgio Negroni,