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Essays on Economics of Adaptive Learning and Imperfect Monitoring
Janjgava, Batlome ; Slobodyan, Sergey (advisor) ; McGough, Bruce (referee) ; Kasa, Kenneth (referee)
The topic of this dissertation is equilibrium selection in models with incomplete and imperfect information. The dissertation consists of three chapters. In the first two chapters, I focus on firms' decision problems with a structural uncertainty and imperfect monitoring. In the first chapter, co-authored with Sergey Slobodyan, we study a market with two firms competing in quantities. Firms are uncertain about demand parameters and have to learn them using price signals. Although the Cournot output is the Nash equilibrium in the model, we identify conditions when cooperative behavior may arise due to learning and find an endogenous price threshold that triggers such behavior. We show that cooperation is more probable in markets with higher precision of firm-specific shocks. In the second chapter, I investigate the social efficiency of free entry in homogeneous product markets. In general, free entry is considered desirable for a society from a social welfare point of view and thus, represents traditional wisdom among economic professions. However, many economists have challenged this view and shown that under Cournot oligopoly with fixed setup costs, the free entry equilibrium always delivers excessive entry in homogeneous product markets, known as the excess entry theorem. In this chapter, I reexamine the...
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Essays in Heterogeneous Learning
Bogomolova, Anna ; Slobodyan, Sergey (advisor) ; McGough, Bruce (referee) ; Molnar, Krizstina (referee)
5 Abstract Essays in Heterogeneous Learning by Anna Bogomolova My dissertation makes a contribution to the …eld of heterogeneous adaptive learning in macroeconomic models. This contribution is presented in the form of three research papers that constitute di¤erent chapters of my thesis. In the …rst chapter of my dissertation, "E-stability That Does Imply Learnability", I provide criteria and su¢ cient conditions for the stability of a structurally heterogeneous economy under the heterogeneous learning of agents, extending the results of Honkapohja and Mitra [36], Bogomolova and Kolyuzhnov [5], and Kolyuzhnov [40]. I provide general criteria (in terms of the corresponding Jacobian matrices) for stability under heterogeneous mixed RLS/SG learning for four classes of models: models without lags and with lags of the endogenous variable and with t- or t 1- dating of expectations, and provide su¢ cient conditions for stability for some simpler cases, where simpli…cations include either the diagonal structure of the shock process behaviour or the heterogeneous RLS learning. I also provide su¢ cient conditions for stability in terms of the structural heterogeneity independent of heterogeneity in learning ( -stability) in terms of E-stability of a suitably de…ned aggregate economy for all four classes of models...
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