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MODELING THE ECONOMIC INTERACTION OF AGENTS WITH DIVERSE ABILITIES TO RECOGNIZE EQUILIBRIUM PATTERNS |
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| Authors: | Michele Piccione Ariel Rubinstein |
| Abstract: | We model differences among agents in their ability to recognize temporal patterns of prices. Using the concept of DeBruijn sequences in two dynamic models of markets, we demonstrate the existence of equilibria in which prices fluctuate in a pattern that is independent of the fundamentals and that can be recognized only by the more competent agents. (JEL: C7, D4, S477) |
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