Levels of Reasoning in Keynesian Beauty Contests: A Generative Framework✶
Felix Mauersberger⁎; Rosemarie Nagel†,1 ⁎Department of Economics and Business, Universitat Pompeu Fabra, Barcelona GSE, Barcelona, Spain†Department of Economics and Business, Universitat Pompeu Fabra, Barcelona GSE, ICREA, Barcelona, Spain1Corresponding author. email address: rosemarie.nagel@upf.edu
Abstract
We introduce a generalization of the Beauty Contest (BC) game as a framework that incorporates different models from micro- and macroeconomics by formulating their reduced forms as special cases of the BC. Examples include public good games, ultimatum games, Bertrand, Cournot, some auctions, asset markets, New-Keynesian, and general equilibrium ...
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