Farsighted Stability With Heterogeneous Expectations
42 Pages Posted: 17 Jun 2019
There are 5 versions of this paper
Farsighted Stability with Heterogeneous Expectations
Farsighted Stability with Heterogeneous Expectations
Farsighted Stability With Heterogeneous Expectations
Farsighted Stability with Heterogeneous Expectations
Farsighted Stability with Heterogeneous Expectations
Date Written: June 5, 2019
Abstract
This paper analyzes farsighted stability when agents have heterogeneous expectations over the dominance paths. We consider expectation functions satisfying the two properties of justifiability and maximality and define stable alternatives as unique stationary points of the expectation function of some agent. We characterize stable alternatives in one-to-one matching models and voting models, and show that the relaxation of the hypothesis of common expectations greatly expands the set of states that can be supported as farsightedly stable.
Keywords: farsighted stable sets, heterogeneous expectations, one-to-one matching, voting, effectivity functions
JEL Classification: C71, D72, D74
Suggested Citation: Suggested Citation