Myopia and Anchoring
<jats:p> We develop an equivalence between the equilibrium effects of incomplete information and those of two behavioral distortions: myopia, or extra discounting of the future; and anchoring of current behavior to past behavior, as in models with habit persistence or adjustment costs. We show...
Main Authors: | , |
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Format: | Article |
Language: | English |
Published: |
American Economic Association,
2022-08-25T16:34:55Z.
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Subjects: | |
Online Access: | Get fulltext |
LEADER | 01101 am a22001693u 4500 | ||
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001 | 144442 | ||
042 | |a dc | ||
100 | 1 | 0 | |a Angeletos, George-Marios |e author |
700 | 1 | 0 | |a Huo, Zhen |e author |
245 | 0 | 0 | |a Myopia and Anchoring |
260 | |b American Economic Association, |c 2022-08-25T16:34:55Z. | ||
856 | |z Get fulltext |u https://hdl.handle.net/1721.1/144442 | ||
520 | |a <jats:p> We develop an equivalence between the equilibrium effects of incomplete information and those of two behavioral distortions: myopia, or extra discounting of the future; and anchoring of current behavior to past behavior, as in models with habit persistence or adjustment costs. We show how these distortions depend on higher-order beliefs and GE mechanisms, and how they can be disciplined by evidence on expectations. We finally illustrate the use of our toolbox with a quantitative application in the context of inflation, a bridge to the HANK literature, and an extension to networks. (JEL C53, D83, D85, E12, E31, E37) </jats:p> | ||
546 | |a en | ||
655 | 7 | |a Article | |
773 | |t 10.1257/AER.20191436 | ||
773 | |t American Economic Review |