Economic agents are not always rational or farsighted and can make decisions according to
simple behavioral rules that vary according to situation and can be studied using the tools of …

This chapter surveys work on dynamic heterogeneous agent models (HAMs) in economics
and finance. Emphasis is given to simple models that, at least to some extent, are tractable …

Half of all Americans have money in the stock market, yet economists can't agree on whether
investors and markets are rational and efficient, as modern financial theory assumes, or …

The moment when the hyperconnectedness of our world became most evident to me was on
October 20th, 2011, when images of the death of Colonel Muammar el-Qaddafi, the former …

The basic paradigm of asset pricing is in vibrant flux. The purely rational approach is being
subsumed by a broader approach based upon the psychology of investors. In this approach …

We develop a multiperiod market model describing both the process by which traders learn
about their ability and how a bias in this learning can create overconfident traders. A trader …

NEARLY EVERYONE would see the truth as between Hamlet and Puck. Including Hamlet
and Puck. Hamlet is feigning madness, and Puck is just being, well, puckish. Model-writing …

We develop a positive behavioral portfolio theory (BPT) and explore its implications for
portfolio constrution and security design. The optimal portfolios of BPT investors resemble …

The concept of adaptively rational equilibrium (ARE) is introduced. Agents adapt their beliefs
over time by choosing from a finite set of different predictor or expectations functions. Each …

Recognising that the economy is a complex system with boundedly rational interacting
agents, the book presents a theory of behavioral rationality and heterogeneous expectations …