This discussion paper led to a publication in the 'European Economic Review' (2013). Vol. 61, pp. 186-204.<P> Rational Expectations (RE) models have two crucial dimensions: 1) agents correctly forecast future prices given all available information, and 2) given expectations, agents solve...</p>

In this paper we want to analyze the internal divisional structure within an organi-zation in the framework of incomplete contract theory. We use the framework of Aghionand Tirole (1997) and define the managerial control structure as "sequence of search".A key feature of this paper which...

This discussion paper led to a publication in the <I>Journal of Economic Dynamics & Control</I>. Volume 36(8), pp. 1101-1120.<P> Recent studies suggest that the type of strategic environment or expectation feedback can have a large impact on whether the market can learn the rational fundamental price. We...</p></i>

Adaptive learning and eductive learning are two widely used ways of modeling learning behavior in macroeconomics. Both approaches yield restrictions on model parameters under which agents are able to learn a rational expectation equilibrium (REE) but these restrictions do not always overlap with...

When complete contracting is not possible, allocating control structure becomes the second-best arrangement. This paper analyzes the design of optimal divisional structure within an organization where ex post bargaining between the potential divisional managers is possible. In much the same...

Rational Expectations (RE) models have two crucial dimensions: (i) agents on average correctly forecast future prices given all available information, and (ii) given expectations, agents solve optimization problems and these solutions in turn determine actual price realizations. Experimental...

In this paper we want to analyze the internal divisional structure within an organi-

Recent studies suggest that the type of strategic environment or expectation feedback can have a large impact on whether the market can learn the rational fundamental price. We present an experiment where the fundamental price experiences large unexpected shocks. Markets with negative...