Different theories of expectation formation and learning usually yield different outcomes for realized market prices in … dynamic models. The purpose of this paper is to investigate expectation formation and learning in a controlled experimental …

have rational expectations, but instead form expectations through least squares learning with an endogenously changing … learning gain. It has been suggested that this type of endogenously changing learning mechanism can create periods of excess … large variances for structural shocks, and the other state has relatively smaller variances. To assess whether learning can …