| Genetic Algorithm Learning to Choose and Use Information | |
| Bryan R. Routledge, Carnegie Mellon University | |
| Macroeconomic Dynamics, April 2001, Vol 5, No. 2 | |
| ABSTRACT A Genetic Algorithm (GA) is used to model learning in a financial model similar to Grossman and Stiglitz (1980) Individuals need to learn how to use a signal, how to infer a signal from a market-clearing price, and whether or not a signal is worth acquiring. We provide examples where the GA does and does not converge to the rational expectations equilibrium. Similar to the results in Routledge (1999), the behavior depends heavily on the rate of experimentation (mutation) in the GA and size of the risky-asset supply in the economy. | |
| DOWNLOAD: PDF File | |
| NOTES: Adaptive Learning in Financial Markets is a related paper investigates more general learning processes | |
| Data updated: 10.09.2002 13:47 |
Updated at: 06.15.2006 11:01
© Routledge 2006