Pertaining to Agent-based Computational Economics (ACE), this work presents two models for the rise and downfall of speculative bubbles through an exchange price fixing based on a double auction mechanism. The first model is based in a finite time horizon context where total expected dividends decrease along with time. The second model follows the greater fool hypothesis: an agent behaviour dep...

Ambiguous beliefs may lead to speculative trade and speculative bubbles. We demonstrate this by showing that the classical Harrison and Kreps (1978) example of speculative trade among agents with heterogeneous beliefs can be replicated with agents having common ambiguous beliefs. More precisely, we show that the same asset prices and pattern of trade can be obtained in equilibrium with agents’ ...

The concepts of ‘knowledge’ and ‘rationality’ are of central importance to fields of science that are interested in human behavior and learning, such as artificial intelligence, economics, and psychology. The similarity between artificial intelligence and economics both are concerned with intelligent thought, rational behavior, and the use and acquisition of knowledge has led to the use of econ...