- Author
- Year
- 2012
- Title
- Is more memory in evolutionary selection (de)stabilizing?
- Journal
- Macroeconomic Dynamics
- Volume | Issue number
- 16 | 3
- Pages (from-to)
- 335-357
- Document type
- Article
- Faculty
- Faculty of Economics and Business (FEB)
- Institute
- Amsterdam School of Economics Research Institute (ASE-RI)
- Abstract
-
We investigate the effects of memory on the stability of evolutionary selection dynamics based on a multinomial logit model in a simple asset pricing model with heterogeneous beliefs. Whether memory is stabilizing or destabilizing depends in general on three key factors: (1) whether or not the weights on past observations are normalized; (2) the ecology or composition of forecasting rules, in particular the average trend extrapolation factor and the spread or diversity in biased forecasts; and (3) whether or not costs for information gathering of economic fundamentals have to be incurred.
- URL
- go to publisher's site
- Language
- English
- Persistent Identifier
- https://hdl.handle.net/11245/1.373927
- Downloads
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