We consider learning in games that are misspecified in that players are unable to learn the true probability distribution over outcomes. Under misspecification, Bayes rule might not converge to the model that leads to actions with the highest objective payoff among the models subjectively...

Is long-run ambiguity a possible outcome of the multiple prior Bayesian learning model? If the prior support is finite, long-run ambiguity is known to be a possible outcome only if the learning problem is misspecified (Marinacci-Massari 2019). Conversely, here we show that, under natural...

In a general equilibrium model with a continuum of traders and bounded aggregate endowment, I investigate the Market Selection Hypothesis that markets favor traders with accurate beliefs. Contrary to known results for economies with (only) finitely many traders, I find that risk attitudes affect...

Economic agents are not always rational or farsighted and can make decisions according to simple behavioral rules that vary according to situation and can be studied using the tools of evolutionary game theory. Furthermore, such behavioral rules are themselves subject to evolutionary forces....

Agency may be exercised by different entities (e.g., individuals, firms, households). A given individual can form part of multiple agents (e.g., he may belong to a firm and a household). The set of agents that act in a given situation might not be common knowledge. We adapt the standard model of...

In a general equilibrium model with a continuum of traders and bounded aggregate endowment, I investigate the Market Selection Hypothesis that markets favor traders with accurate beliefs. Contrary to known results for economies with (only) finitely many traders, I find that risk attitudes affect...

The wisdom of the crowd applied to financial markets asserts that prices represent a consensus belief that is more accurate than individual beliefs. However, a market selection argument implies that prices eventually reflect only the beliefs of the most accurate agent. In this paper, we show how...

What does it take to survive in the market? Previous literature has proposed sufficient conditions for a trader to vanish, which depend on pairwise comparisons of traders' discounted beliefs. We propose a novel condition that focuses on the ratio of traders' discounted beliefs and (approximate)...

In this paper, I use the standard machinery of dynamic general equilibrium models to generate a rich class of probabilities and discuss their properties. This class includes probabilities consistent with Bayes' rule and known non-Bayesian rules. If the prior support is correctly specified, I...

This paper investigates the hypothesis that markets favor traders with more accurate beliefs. Unlike existing results, notably Sandroni (2000) and Blume-Easley (2006), I propose an approach that (i) is directly informative about equilibrium prices, (ii) provides a condition that is necessary as...