Project CEMAPRE internal
|Title||Endogenous switching of expectations|
|Participants||Adriana Cornea-Madeira (Principal Investigator), Joao Madeira|
|Summary||It is common in economic modelling to assume all agents have the same expectations (rational|
expectations or adaptative expectations) or that different types of agents use different rules but
cannot change their type (an agent with adaptative expectations cannot change to become
forward-looking). We are working on several projects in which we allow agents to switch endogenously
between different expectation rules based on their previous forecast performance.