In a self-confirming equilibrium, each player correctly forecasts the actions that opponents will take along the equilibrium path, but may be mistaken about the way that opponents would respond to deviations. This models a steady state of a learning process in which players observe actions...

This paper studies properties of stochastic objective functions, that is, objective functions which can be written as the expected value of a payoff function.

This paper systematically analyses and enriches the observational learning paradigm of Banerjee (1992) and Bikhchandani, Hirscleifer, and Welch (1992).

In this paper, we derive a general Hajek-Renyi type inequality for vector-valued martingales. Several well known inequalities are shown to be special cases of this general inequality. We also derive a similar inequality for dependent sequences. We then apply the inequality to the problem of...

The paper provides a general analysis of the types of models with E-Perturbations which have been used recently to discuss the evolution of social conventions. Two new measures of the size and structure of the basins of attraction of dynamic systems, the radius and coradius, are introduced in...

Social commentators from William Julius Wilson to Charles Murray have argued that increased sorting people into internally homogeneous neighborhoods, schools, and marriages is spurring long- run inequality. Calibration of a formal model suggests that these fears are misplaced.

This paper has pushed Becker's matching insights into a quite plausible search setting. Exploiting the implicit integral equation (10), we gave a thorough characterization of cross-sectional matching patterns in the equilibrium and constrained s ocial optimum of a frictional matching model. In...

This paper has pushed Becker's matching insights into a quite plausible search setting. Exploiting the implicit integral equation (10), we gave a thorough characterization of cross-sectional matching patterns in the equilibrium and constrained s ocial optimum of a frictional matching model. In...

We prove that the recently proposed informational herding models are but special cases of a standard single person experimentation model with myopia. We then re-interpret the incorrect herding outcome as a familiar failure of complete learning in an optimal experimentation problem.

The simulation result of Nunes, Kuan, and Newbold suggests that it is possible to estimate a spurious break for a regression model with I(1) disturbances. In this note, we provide a rigorous proof for this phenomenon.