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Get A Theory of Adaptive Economic Behavior PDF

By John G. Cross

ISBN-10: 0521251109

ISBN-13: 9780521251105

This ebook develops dynamic monetary types utilizing the viewpoint and analytic framework supplied via mental studying conception. This framework is used to solve obvious contradictions among optimization idea, which lies on the center of all glossy financial thought, and daily facts that short-run fiscal behaviour can't kind of be defined completely because the final result of successfully carried out self-interest. the writer applies this point of view to a few areas of difficulty during which literal purposes of maximization idea haven't often proved to be passable. those comprise analyses of decision-making less than uncertainty and playing behaviour, the function of consumer-oriented ads in influencing behaviour, the endurance of cost dispersions in markets, and inflation.

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Extra resources for A Theory of Adaptive Economic Behavior

Sample text

The inadequacy of this concept of " reinforcer" has been apparent to psychologists for some time. In response, a number of models have been devised in which one interprets experimental conditions in terms of the constraints they impose on behavior (Timberlake and Allison, 1 974; Models of convergence 27 Allison, 1 98 1 ) . Comparison of unconstrained behavior with that under constraint then provides the experimental data. All of these models have a strongly economic flavor, and, in effect , their authors are turning to ordinalist utility models to provide an alternative to the cruder presump­ tion that any biological need under conditions of deprivation constitutes a "reinforcer .

Similar simulations can be used to describe the consequences of changes in price. Suppose the household is purchasing a commodity x at a price P. For a simple example, we can employ the model described in (3 . 08, 1 . 1 2, 1 . 32, and 1 . 36 and values of P = l . 938, and 0. 882. I is held constant at I= 1 . 5 . 2 describes the results of such a simulation using the same initial conditions described in the previous case and the same procedure of finding expected consumption of the commodity as a function of price and length of the lag after a once-and­ for-all price change.

20) is strictly positive, and we can conclude that for any

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A Theory of Adaptive Economic Behavior by John G. Cross


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