scholarly journals LEARNING IN COBWEB EXPERIMENTS

2007 ◽  
Vol 11 (S1) ◽  
pp. 8-33 ◽  
Author(s):  
CARS HOMMES ◽  
JOEP SONNEMANS ◽  
JAN TUINSTRA ◽  
HENK VAN DE VELDEN
Keyword(s):  
Steady State ◽  
Rational Expectations ◽  
Dynamic Models ◽  
Good Description ◽  
Market Model ◽  
Equilibrium Equations ◽  
Market Prices ◽  
Sample Mean ◽  
Expectation Formation ◽  
Price Fluctuations

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 environment. Subjects are asked to predict the next period's aggregate price in a dynamic commodity market model with feedback from individual expectations. Subjects have no information about underlying market equilibrium equations, but can learn by observing past price realizations and predictions. We conduct a stable, an unstable, and a strongly unstable treatment. In the stable treatment, rational expectations (RE) yield a good description of observed aggregate price fluctuations: prices remain close to the RE steady state. In the unstable treatments, prices exhibit large fluctuations around the RE steady state. Although the sample mean of realized prices is close to the RE steady state, the amplitude of the price fluctuations as measured by the variance is significantly larger than the amplitude under RE, implying persistent excess volatility. However, agents' forecasts are boundedly rational in the sense that fluctuations in aggregate prices are unpredictable and exhibit no forecastable structure that could easily be exploited.

scholarly journals Learning as a Rational Foundation for Macroeconomics and Finance

2013 ◽  
Author(s):  
George W. Evans ◽  
Seppo Honkapohja
Keyword(s):  
Monetary Policy ◽  
Steady State ◽  
Interest Rate ◽  
Lower Bound ◽  
Rational Expectations ◽  
Price Level ◽  
Decision Rules ◽  
Empirical Work ◽  
Learning Approach ◽  
Expectation Formation

This chapter examines the central ideas about learning and bounded rationality for macroeconomics and finance. It first introduces the main methodological issues concerning expectation formation and learning before discussing the circumstances in which rational expectations may arise. It then reviews empirical work that applies learning to macroeconomic issues and asset prices, along with the implications of the use of structural knowledge in learning and the form of the agents' decision rules. As an application, the scope of Ricardian Equivalence is considered. The chapter also presents three applications of the learning approach to monetary policy: the appropriate specification of interest rate rules; implementation of price-level targeting to achieve learning stability of the optimal rational expectations equilibrium; and whether under learning, commitment to price-level targeting can be sufficient to rule out the deflation trap of a zero interest rate lower bound and return the economy to the intended rational expectations steady state.

scholarly journals Speculative housing markets and rent control: insights from nonlinear economic dynamics

2021 ◽  
Author(s):  
Noemi Schmitt ◽  
Frank Westerhoff
Keyword(s):  
Housing Market ◽  
Housing Stock ◽  
House Price ◽  
Housing Markets ◽  
Market Model ◽  
Market Dynamics ◽  
Rent Control ◽  
Forecasting Accuracy ◽  
Expectation Formation ◽  
Rent Level

AbstractWe propose a novel housing market model to explore the effectiveness of rent control. Our model reveals that the expectation formation and learning behavior of boundedly rational homebuyers, switching between extrapolative and regressive expectation rules subject to their past forecasting accuracy, may create endogenous housing market dynamics. We show that policymakers may use rent control to reduce the rent level, although such policies may have undesirable effects on the house price and the housing stock. However, we are also able to prove that well-designed rent control may help policymakers to stabilize housing market dynamics, even without creating housing market distortions.

VAR INTERPRETATIONS OF HAAVELMO’S MARKET MODEL OF CAPITAL AND INVESTMENT

2014 ◽  
Vol 31 (2) ◽  
pp. 195-212
Author(s):  
Erik Biørn
Keyword(s):  
Rational Expectations ◽  
Joint Effect ◽  
Simultaneous Equation ◽  
Market Model ◽  
Equation Modeling ◽  
Vector Autoregressive ◽  
Investment Theory ◽  
The Interest Rate ◽  
Geometric Decay

In the paper attempts are made to integrate two parts of Trygve Haavelmo’s work: investment theory and dynamic econometric models of interrelated markets. Specifically, the duality in the representation of the capital service price and the capital quantity in relation to the investment price and quantity are brought to the forefront and confronted with elements from simultaneous equation modeling of vector autoregressive systems containing exogenous variables (VARX), using linear four-equation models. The role of the interest rate and the modeling of the expectation element in the capital service price and the capital’s retirement pattern, and their joint effect on the model’s investment quantity and price dynamics are discussed. Stability conditions are illustrated by examples. Extensions relaxing geometric decay and ways of accounting for forward-looking behavior, including rational expectations, are outlined. Some remarks on the theory-data confrontation of this kind of model are given.

Analysis and Control of Torque Split in Hybrid Electric Vehicles by Incorporating Powertrain Dynamics

2018 ◽  
Vol 140 (11) ◽  
Author(s):  
Mehran Bidarvatan ◽  
Mahdi Shahbakhti
Keyword(s):  
Steady State ◽  
Energy Consumption ◽  
Energy Management ◽  
Control Strategy ◽  
Hybrid Electric Vehicle ◽  
Internal Combustion Engines ◽  
Dynamic Models ◽  
Management Control ◽  
Drive Cycle ◽  
Hybrid Electric

Hybrid electric vehicle (HEV) energy management strategies usually ignore the effects from dynamics of internal combustion engines (ICEs). They usually rely on steady-state maps to determine the required ICE torque and energy conversion efficiency. It is important to investigate how ignoring these dynamics influences energy consumption in HEVs. This shortcoming is addressed in this paper by studying effects of engine and clutch dynamics on a parallel HEV control strategy for torque split. To this end, a detailed HEV model including clutch and ICE dynamic models is utilized in this study. Transient and steady-state experiments are used to verify the fidelity of the dynamic ICE model. The HEV model is used as a testbed to implement the torque split control strategy. Based on the simulation results, the ICE and clutch dynamics in the HEV can degrade the control strategy performance during the vehicle transient periods of operation by around 8% in urban dynamometer driving schedule (UDDS) drive cycle. Conventional torque split control strategies in HEVs often overlook this fuel penalty. A new model predictive torque split control strategy is designed that incorporates effects of the studied powertrain dynamics. Results show that the new energy management control strategy can improve the HEV total energy consumption by more than 4% for UDDS drive cycle.

scholarly journals Erfahrung und Erwartung – eine vernachlässigte wirtschaftshistorische Perspektive?

2018 ◽  
Vol 59 (2) ◽  
pp. 329-341
Author(s):  
Mark Jakob ◽  
Alexander Nützenadel ◽  
Jochen Streb
Keyword(s):  
Social Sciences ◽  
Rational Expectations ◽  
State Of The Art ◽  
Special Issue ◽  
Historical Events ◽  
Main Hypothesis ◽  
Expectation Formation ◽  
Economic Behaviour ◽  
Complex Process ◽  
Economic Expectations

Abstract The DFG Priority Programme “Experience and Expectation – Historical Foundations of Economic Behaviour” explores how economic actors form their expectations under certain historical conditions. This project’s main hypothesis is that the formation of economic expectations is a complex process that cannot be explained solely by simple concepts such as adaptive or rational expectations, and is shaped by historical events and experience. In this introduction, we review the state of the art of modelling expectation formation in social sciences and history and preview the main findings of the articles published in this special issue.

Theoretical and Experimental Analysis of Nonlinear Dynamics in a Linear Compressor

2001 ◽  
Vol 124 (1) ◽  
pp. 152-154 ◽  
Author(s):  
Gyu-Sang Choe ◽  
Kwang-Joon Kim
Keyword(s):  
Steady State ◽  
Nonlinear Response ◽  
Dynamic Models ◽  
Steady State Response ◽  
Describing Function ◽  
Linear Compressor ◽  
Response Characteristics ◽  
State Response ◽  
Jump Phenomena ◽  
Method Effects

Steady-state nonlinear response characteristics of a linear compressor are investigated theoretically and experimentally. In the theoretical approach, motions of not only piston but also cylinder are considered and dynamic models for steady-state response predictions are formulated by applying the describing function method. Effects of piston mass on the jump phenomena are predicted by the derived models as an example of design parameter variation and compared with actual experimental results.

The Mechanics of a Helically Wrapped Thin-Shell Supported by an Externally Pressurized Air Cushion

2002 ◽  
Author(s):  
Sinan Mu¨ftu¨
Keyword(s):  
Steady State ◽  
Thin Shell ◽  
Previous Model ◽  
Fluid Structure Interactions ◽  
Oblique Angle ◽  
Equilibrium Equations ◽  
State Equilibrium ◽  
Air Cushion ◽  
The Web

The mechanics of the fluid structure interactions between a flexible web and an externally pressurized air cushion is modeled. The web is wrapped around the porous cylindrical air-reverser at an oblique angle. The air reverser supplies pressurized air into the web/air-reverser clearance. This model is an extension of a previous model and allows the web to be wrapped around the cylinder in a helical fashion. The geometric relations are based on Rongen’s work (1994) and steady state equilibrium equations are developed based on the work of Mu¨ftu¨ and Cole (1999). This paper describes the theory. A case study is presented.

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