A well known problem in economics is to describe properly a situation where N agents are repeatedly competing to use the same limited resource. A version of this problem is known in the literature as the El Farol game: week after week N agents face the decision whether to go or not to go to a...

Under the assumption of bounded rationality, economic agents learn from their past mistaken predictions by combining new and old information to form new beliefs. The purpose of this paper is to examine how the policy-maker, by affecting private agents' learning process, determines the speed at...

We develop a learning rule that generalises the well known fading memory learning in the sense that the weights attached to the available time series data are not constant and are updated in light of the prediction error(s). The underlying idea is that confidence in the available data will be...

In this paper we study a local version of the Minority Game where agents are placed on the nodes of a directed graph. Agents care about beingin the minority of the group of agents they are currently linked to and employ myopic best-reply rules to choose their next-period state. We show that, in...

In this paper it is argued that whether cooperation is established in a prisoner's dilemma-like situation is determined by cognitive learning processes. To prove this claim a simulation model is build. This model is based on knowledge about the cognitive learning process that has been gained in...

We study identification in a class of three-equation monetary models. We argue that these models are typically not identified. For any given exactly identified model, we provide an algorithm that generates a class of equivalent models that have the same reduced form. We use our algorithm to...

In this paper we study the dynamics of a simple asset pricing model describing the trading activity of heterogeneous agents in a ''stylized'' market. The economy in the model contains two assets: a bond with risk-less return and a dividend paying security. The price of the security is determined...

This paper studies a game theoretic model where agents choose between two updating rules to predict a future endogenous variable. Agents rationally choose between these predictors based on relative performance. Conditions for evolutionary stability and stability under learning are found for the...

This paper develops theoretical foundations for the computation of competitive equilibria in dynamic stochastic general equilibrium models with heterogeneous agents and incomplete financial markets. While there are several algorithms which compute prices and allocations for which agents' first...

In a dynamic asset pricing model informed traders receive a noisy signal of the value of a risky asset while uninformed traders learn to extract the information from the price. The relative popularity of the two strategies depends on past performance. An "intensity of choice" parameter is...