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Does bounded rationality lead to individual heterogeneity? The impact of the experimentation process and of memory constraints

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dc.creator Casari, Marco
dc.date 2007-11-05T14:39:03Z
dc.date 2007-11-05T14:39:03Z
dc.date 2003-03-29
dc.date.accessioned 2017-01-31T00:58:01Z
dc.date.available 2017-01-31T00:58:01Z
dc.identifier http://hdl.handle.net/10261/1843
dc.identifier.uri http://dspace.mediu.edu.my:8181/xmlui/handle/10261/1843
dc.description In this paper we explore the effect of bounded rationality on the convergence of individual behavior toward equilibrium. In the context of a Cournot game with a unique and symmetric Nash equilibrium, firms are modeled as adaptive economic agents through a genetic algorithm. Computational experiments show that (1) there is remarkable heterogeneity across identical but boundedly rational agents; (2) such individual heterogeneity is not simply a consequence of the random elements contained in the genetic algorithm; (3) the more rational agents are in terms of memory abilities and pre-play evaluation of strategies, the less heterogeneous they are in their actions. At the limit case of full rationality, the outcome converges to the standard result of uniform individual behavior.
dc.language eng
dc.relation UFAE and IAE Working Papers
dc.relation 583.03
dc.rights openAccess
dc.subject Bounded rationality
dc.subject Genetic algorithms
dc.subject Individual heterogeneity
dc.title Does bounded rationality lead to individual heterogeneity? The impact of the experimentation process and of memory constraints
dc.type Documento de trabajo


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