Expectations, Rationality and Economic Performance: Models and Experiments - Hardcover

Rötheli, Tobias F.

Hardcover

ISBN 10: 1845427424 ISBN 13: 9781845427429

Publisher: Edward Elgar Publishing Ltd, 2007

Synopsis

This book offers a broad perspective on the economics of expectations. Experimental studies are used to analyse how human bounded rationality affects economic performance. The challenges posed for policy making are also addressed.

Tobias Rotheli begins by presenting the basic tools and theoretical models necessary to our understanding of rational and boundedly rational expectations and their role in economic life. Key topics discussed include expectations in general equilibrium theory, probabilities and expected utility, heterogeneity of economic agents, behavioural alternatives to forecasting and the effects of expectations heuristics, particularly in financial markets. The author then goes on to explore the fascinating insights behavioural economics - the empirical analysis of economic decision making - has to offer. Here experimental studies illustrate the effects of costly information, the role of pattern recognition as basis of expectations, anticipation and coordination failures, and the role of expectations in determining the general price level. The book also addresses the implications of the experimental findings for applied economics.

Aiming to achieve the accessibility of a textbook, this research monograph will appeal to economic researchers interested in economic behaviour and theory, as well as students taking upper-level undergraduate and graduate courses. It will also be of interest to economists working in business and government.

About this title

About the Author

Tobias F. Rötheli, Professor of Economics, University of Erfurt, Germany

Edition details

• Publisher: Edward Elgar Publishing Ltd
• Publication date: 2007
• Language: English
• ISBN 10: 1845427424
• ISBN 13: 9781845427429
• Binding: Hardcover
• Number of pages: 224