Arbeitspapier
Overconfidence, subjective perception, and pricing behavior
We study the implications of overconfidence for price setting in a monopolistic competition setup with incomplete information. Our price-setters overestimate their abilities to infer aggregate shocks from private signals. The fraction of uninformed firms is endogenous; firms can obtain information by paying a fixed cost. We find two results: (1) overconfident firms are less inclined to acquire information, and (2) prices might exhibit excess volatility driven by nonfundamental noise. We explore the empirical predictions of our model for idiosyncratic price volatility.
- Sprache
-
Englisch
- Erschienen in
-
Series: Working Paper ; No. 2017-14
- Klassifikation
-
Wirtschaft
- Thema
-
overconfidence
imperfect common knowledge
information acquisition
inflation volatility
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Pierpaolo, Benigno
Karantounias, Anastasios G.
- Ereignis
-
Veröffentlichung
- (wer)
-
Federal Reserve Bank of Atlanta
- (wo)
-
Atlanta, Ga.
- (wann)
-
2017
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Pierpaolo, Benigno
- Karantounias, Anastasios G.
- Federal Reserve Bank of Atlanta
Entstanden
- 2017
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