Adaptive Agents May Be Smarter than You Think: Unbiasedness in Adaptive Expectations

Arbeitspapier

Agents forming adaptive expectations generally make systematic mistakes. This characterization has fostered the rejection of adaptive expectations in macroeconomics. Experimental evidence, however, shows that in complex environments human subjects frequently rely on adaptive heuristics – model-consistent expectations being simply too difficult or impossible to implement – but their forecasting performance is not as inadequate as assumed in the characterization above. In this paper we show that adaptive agents may not be as gullible as we used to think. In a model with adaptive expectations augmented with a Belief Correction term (which takes into account the drift of the macroeconomic variable of interest) the average forecasting error is frequently close to zero, hence (belief amended) adaptive expectations are close to unbiasedness.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CESifo Working Paper ; No. 9205

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Computational Techniques; Simulation Modeling ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness ; Expectations; Speculations ; Macro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on the Macro Economy‡
• Thema: heterogeneous adaptive expectations ; belief correction ; agent based models

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Palestrini, Antonio ; Delli Gatti, Domenico ; Gallegati, Mauro ; Greenwald, Bruce C.
• Ereignis: Veröffentlichung
• (wer): Center for Economic Studies and ifo Institute (CESifo)
• (wo): Munich
• (wann): 2021

Weitere Informationen

• Handle: http://hdl.handle.net/10419/245386
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ