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Are rational expectations equilibria with private information eductively stable?

Research output: Journal contributions › Journal articles › Research › peer-review

Standard

Are rational expectations equilibria with private information eductively stable? / Heinemann, M.
In: Journal of Economics, Vol. 82, No. 2, 01.06.2004, p. 169-194.

Research output: Journal contributions › Journal articles › Research › peer-review

Harvard

Heinemann, M 2004, 'Are rational expectations equilibria with private information eductively stable?', Journal of Economics, vol. 82, no. 2, pp. 169-194. https://doi.org/10.1007/s00712-003-0046-6

APA

Heinemann, M. (2004). Are rational expectations equilibria with private information eductively stable? Journal of Economics, 82(2), 169-194. https://doi.org/10.1007/s00712-003-0046-6

Vancouver

Heinemann M. Are rational expectations equilibria with private information eductively stable? Journal of Economics. 2004 Jun 1;82(2):169-194. doi: 10.1007/s00712-003-0046-6

Bibtex

@article{8a7f7b945d294ed68e2bbf3cdeba1216,
title = "Are rational expectations equilibria with private information eductively stable?",
abstract = "The paper derives conditions for eductive stability of rational expectations equilibria in simple linear economic models with private information. Following Guesnerie (1992; 2002), the concept of eductive stability is used. It is shown that even in a private information setting, rational expectations equilibria might be justified as a result of mental process of reasoning of the agents. The paper considers an equilibrium concept, where the agents are unable to condition their forecasts on the actual market price. It is shown that eductive stability in this case requires that a condition is satisfied that is also relevant in the symmetric information case. This condition is compared to the respective stability condition that must hold if agents are able to use the current market price as an additional source of information. It turns out that the conditions for eductive stability that emerge under both equilibrium concepts differ.",
keywords = "Economics, rational expectations, private information, eductive stability",
author = "M Heinemann",
year = "2004",
month = jun,
day = "1",
doi = "10.1007/s00712-003-0046-6",
language = "English",
volume = "82",
pages = "169--194",
journal = "Journal of Economics",
issn = "0931-8658",
publisher = "Springer",
number = "2",

}

RIS

TY - JOUR

T1 - Are rational expectations equilibria with private information eductively stable?

AU - Heinemann, M

PY - 2004/6/1

Y1 - 2004/6/1

N2 - The paper derives conditions for eductive stability of rational expectations equilibria in simple linear economic models with private information. Following Guesnerie (1992; 2002), the concept of eductive stability is used. It is shown that even in a private information setting, rational expectations equilibria might be justified as a result of mental process of reasoning of the agents. The paper considers an equilibrium concept, where the agents are unable to condition their forecasts on the actual market price. It is shown that eductive stability in this case requires that a condition is satisfied that is also relevant in the symmetric information case. This condition is compared to the respective stability condition that must hold if agents are able to use the current market price as an additional source of information. It turns out that the conditions for eductive stability that emerge under both equilibrium concepts differ.

AB - The paper derives conditions for eductive stability of rational expectations equilibria in simple linear economic models with private information. Following Guesnerie (1992; 2002), the concept of eductive stability is used. It is shown that even in a private information setting, rational expectations equilibria might be justified as a result of mental process of reasoning of the agents. The paper considers an equilibrium concept, where the agents are unable to condition their forecasts on the actual market price. It is shown that eductive stability in this case requires that a condition is satisfied that is also relevant in the symmetric information case. This condition is compared to the respective stability condition that must hold if agents are able to use the current market price as an additional source of information. It turns out that the conditions for eductive stability that emerge under both equilibrium concepts differ.

KW - Economics

KW - rational expectations

KW - private information

KW - eductive stability

U2 - 10.1007/s00712-003-0046-6

DO - 10.1007/s00712-003-0046-6

M3 - Journal articles

VL - 82

SP - 169

EP - 194

JO - Journal of Economics

JF - Journal of Economics

SN - 0931-8658

IS - 2

ER -

Related by journal

Guesnerie, R.: Assessing Rational Expectations 2. ‘Eductive’ Stability in Economics. 2nd Edition

Heinemann, M., 01.04.2006, In: Journal of Economics. 87, 3, p. 303-306 4 p.

Research output: Journal contributions › Critical reviews › Research

On the effects of redistribution on growth and entrepreneurial risk-taking

Clemens, C. & Heinemann, M., 08.2006, In: Journal of Economics. 88, 2, p. 131-158 28 p.

Research output: Journal contributions › Journal articles › Research › peer-review

Other publications by the same author(s)

Anmerkungen zur Krise und zur Krisenbewältigung durch die Wirtschaftspolitik

Heinemann, M., 2011, Mit der Krise leben?: Europäische Konflikte, innergesellschaftliche Verwerfungen, Perspektiven. Hannover: Offizin-Verlag, p. 45-62 15 p. (Kritische Interventionen; vol. 12).

Research output: Contributions to collected editions/works › Contributions to collected editions/anthologies › Research › peer-review

Convergence of adaptive learning and expectational stability: The case of multiple rational-expectations equilibria

Heinemann, M., 01.09.2000, In: Macroeconomic Dynamics. 4, 3, p. 263-288 26 p.

Research output: Journal contributions › Journal articles › Research › peer-review

Indeterminierte Gleichgewichte und Sunspots in dynamischen makroökonomischen Modellen

Heinemann, M., 2003, In: Jahrbuch für Wirtschaftswissenschaften. 53, 3, p. 315-340 26 p.

Research output: Journal contributions › Journal articles › Research › peer-review

Ist die empirische Makroökonomik eine wissenschaftliche Illusion?

Heinemann, M., Haslinger, F. & Breitung, J., 1993, Die ökonomische Wissenschaft und ihr Betrieb. Frankfurt/New York: Campus Verlag, p. 150-203 54 p. (Ökonomie und Gesellschaft; vol. 10).

Research output: Contributions to collected editions/works › Contributions to collected editions/anthologies › Research

Künstliche Experimente und Konjunkturforschung: Eine exemplarische Betrachtung des wissenschaftlichen Erkenntnisfortschritts

Heinemann, M., 1996, Experiments in Economics - Experimente in der Ökonomie. Frankfurt/New York: Campus Verlag, p. 273-295 23 p. (Ökonomie und Gesellschaft : Jahrbuch; vol. 13).

Research output: Contributions to collected editions/works › Contributions to collected editions/anthologies › Research

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