Standard theoretical models of household saving behavior do not typically assume that household perceptions of the world change in response to observed events. In light of the potential importance of such perception changes (e.g., after a financial crisis), this paper considers the hypothesis...

We consider the problem of an employer who has to choose whether to reemploy agents with a positive track record or agents who were unsuccessful. While previously successful managers are likely to be of high ability, they have also accumulated wealth and will be harder to motivate in the future....

Strategic settings are often complex and agents who lack deep reasoning ability may initially fail to make optimal decisions. This paper experimentally investigates how the decision making quality of an agent's opponent impacts learning-by-doing (LBD) and learning-by-observing (LBO) in a...

This paper presents a new agent-based financial market. It is designed to be both simple enough to gain insights into the nature and structure of what is going on at both the agent and macro levels, but remain rich enough to allow for many interesting evolutionary experiments. The model is...

Several studies show that evolution favors non-selfish preferences only if preference types are observable. We present a new evolutionary scenario applied to the Centipede Game, where we adopt self-confirming equilibrium to capture behavior. We show that altruism may be evolutionarily successful...

The core idea of evolution is that order in living systems emerges from a simple process of variation and selection. In biological systems we usually understand the source of variation as best described by the mechanisms of genetics. If human social systems are evolutionary systems, however, it...

In this article, we investigate the possibility of sunspot equilibria to emerge from a process of learning and adaptation on agents’ beliefs. We consider both finite state Markov sunspots and sunspots in autoregressive form, and derive conditions for the existence of an heterogeneous...