Seminar CRENoS DECA - Galo Nuño

30/03/2011 - 14:00 to 16:00


Aula Magna - Facoltà di Economia

Viale Sant'Ignazio 74, Cagliari 


Presentation of paper

Heterogeneity and Learning in Asset Markets



Galo Nuño - Banco de España



The rational expectations hypothesis has become the benchmark in many elds of economics despite the considerable information burden it imposes on agents. In particular, it requires that agents know ex-ante, the higher-order beliefs of the rest of participants. The aim of the present paper is to analyze whether the absence of information about other agents' beliefs can be overcome by learning and coordination in a centralized market. The main question is whether, by trading among themselves in a centralized market, agents can learn to coordinate onto a rational expectations equilibrium. A second question, provided that coordination is feasible, is how fast convergence to the REE is and how it is influenced by the structural parameters of the model.


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