Inferential Expectations and the Missing Middle of Price Changes
Univ. of East Anglia, School of Economics Working Paper No. 8/2010
7 Pages Posted: 5 May 2010
Date Written: May 3, 2010
Microeconomic evidence suggests price changes are either very small, or large. The theory of inferential expectations predicts this phenomena if agents use a low test size, reflecting a reluctance to change their minds on the basis of evidence.
Keywords: Inferential Expectations, Prices, Near-rationality
JEL Classification: E31, D84
Suggested Citation: Suggested Citation