Overall, the research in ExSIDE contributes to four scientific work packages (WPs).
WP4: Role of Expectations and Social Influence for Economic Dynamics
The agenda of this WP is to analyze the effects of expectation dynamics on market dynamics in labour and financial markets as well as on macroeconomic dynamics. In particular, the implications of different types of expectation formation processes for the dynamics of key variables in these economic domains are explored. The design of the expectation formation models builds on experimental, empirical and theoretical insights obtained in the other WPs.
WP5: Policy Design under Consideration of Expectation Dynamics
This WP has a strong policy orientation and focusses on the optimal design of fiscal and monetary policy under proper consideration of the feedback between policies and the endogenous evolution of expectations in the population. The policy analyses are carried out in the framework of calibrated models in which individuals’ expectations are heterogeneous and evolve according to processes with empirical foundations. The analysis in this WP to a large extend relies on a combination of numerical methods and agent-based simulation.
WP2: Behavioural and Psychological Foundations of Expectation Formation
Work in this WP will address foundational issues of expectation formation combining experimental and empirical work with behavioral modelling. Different innovative techniques will be used to gain a systematic understanding of main properties of expectation formation processes in different economic settings. The insights about expectation formation processes stemming from these experimental and empirical analyses will be used in designing and calibrating expectation formation models to be integrated in modeling frameworks in different areas of economic analysis.
WP3: Social Influence and Opinion Diffusion
This WP focusses on the analysis of social influence dynamics in different economic settings and the development of expectation dynamics models incorporating social influence effects. In particular, it is studied how opinion diffusion and social contagion are affected by the presence of anti-conformist agents as well as by forward looking individuals. A key issue in this respect is in how far the emergence of homophily and segregation in networks is fostered by the existence of forward-looking individuals.
To see the papers related to each Work Package click on the WP-Titles above!