equilibrium, retains equilibrium expectations but adds stochastic response (of which players are aware). Learning theories explain …) or foregone payoffs (model-directed learning). Finally, many studies reject the joint hypothesis of equilibrium …

infinite-horizon learning, and subjective expectations with Euler-equation learning. Under rational expectations, the model … necessitates of large, possibly unrealistically so, degrees of myopia. The same result persists under infinite-horizon learning …, given that agents are still remarkably far-sighted. But, under Euler-equation learning, the model can fit the data with only …

news. This tendency is assumed to support the optimism bias. Whether this learning bias is specific to ‘high …-level' abstract belief update or a particular expression of a more general ‘low-level' reinforcement learning process is unknown. Here … we report evidence in favour of the second hypothesis. In a simple instrumental learning task, participants incorporated …