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...