Heterogeneity as a Natural Source of Randomness

@inproceedings{Weide2003HeterogeneityAA,
  title={Heterogeneity as a Natural Source of Randomness},
  author={Cees Diks Roy van der Weide},
  year={2003}
}
  • Cees Diks Roy van der Weide
  • Published 2003
We propose a new framework for studying the evolution of heterogeneous beliefs in a dynamic feedback setting. Beliefs distributions are defined on a beliefs space representing a continuum of possible strategies agents can choose from. Agents base their choices on past performances, re-evaluating strategies as new information becomes available. The distribution of beliefs among agents is updated using a continuous choice model. This leads to price dynamics in which the beliefs distribution… CONTINUE READING

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