Structural modeling of economic choices of heterogeneous agents

Epidemiological Expectations in Economics



Carroll, C., Wang, T. (forthcoming). Epidemiological Expectations in Economics. Handbook of Economic Expectations.




‘Epidemiological’ models of belief formation put social interactions at their core; such models are the main (almost, the only) tool used by non-economists to study the dynamics of beliefs in populations. We survey the (comparatively) small literature in which economists attempting to model the consequences of beliefs about the future – ‘expectations’ – have employed what we view as a full-fledged epidemiological approach to explore an economic question. We draw connections to related work on narrative economics, news/rumor spreading, ‘contagion,’ and the spread of online content. Finally, we discuss a number of promising directions for future research.


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