becoming a metric for rationality. When inferential expectations are built into a Dornbusch-style model of the exchange rate … inferential expectations. If a belief is overturned through the build-up of evidence, agents are assumed to switch to the rational … expectation. Rational expectations are shown to be a special (limiting) case of inferential expectations, with the test size a …

becoming a metric for rationality. We present the results of an experiment that supports inferential expectations. When … inferential expectations. If a belief is overturned through the build-up of evidence, agents are assumed to switch to the rational … expectation. Rational expectations are shown to be a special (limiting) case of inferential expectations, with the test size alpha …

becoming a metric for rationality. We present the results of an experiment that supports inferential expectations. When … inferential expectations. If a belief is overturned through the build-up of evidence, agents are assumed to switch to the rational … expectation. Rational expectations are shown to be a special (limiting) case of inferential expectations, with the test size alpha …

are tracked well. In a stochastic treatment, we model expectations using a Neyman–Pearson hypothesis test (inferential … expectations) and find evidence of belief conservatism and uncovered interest rate parity failure. The market environment magnifies …

assumption that belief formation be treated as a classical hypothesis test, which we label inferential expectations, can explain … predictions. In our stochastic environment, inferential expectations with a low test size alpha (conservative inferential … expectations) predict exchange rates better than rational expectations in ten sessions out of twelve. Belief conservatism appears …

assumption that belief formation be treated as a classical hypothesis test, which we label inferential expectations, can explain … predictions. In our stochastic environment, inferential expectations with a low test size alpha (conservative inferential … expectations) predict exchange rates better than rational expectations in ten sessions out of twelve. Belief conservatism appears …

The paper proves that the Bayesian approach to learning and expectations formation implies no propositions that could … observations, and the assumption of Bayesian rationality. Since no betting strategy is irrational, Bayesianism is useless as a …

The notion of optimized rational behavior in the formation of expectations is used in this note to study the dynamics …, the selection of an optimal degree of rationality may lead to the generation of long-term endogenous fluctuations. …