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What does rational expectation (RE) mean in agent-based modeling context? What are the relationships between RE and expectation and outcome?

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    $\begingroup$ There is a good explanation on Wikipedia en.wikipedia.org/wiki/Rational_expectations $\endgroup$
    – user1157
    Jan 15, 2014 at 15:33
  • $\begingroup$ Thanks. The term "Use of all available information" is not really clear for me. Let us consider N agents. If some agents has partial information and some with full information, is it a case of rational expectation or no? $\endgroup$
    – Ranaivo
    Jan 16, 2014 at 14:24
  • $\begingroup$ My understanding is that each agent uses all information she has, which is usually not full information. Rational expectaion means that the errors, which result from the agents not having full information and the way the agents process this information, cancel out over the whole population of agents. Resulting in rational behaviour on average. $\endgroup$
    – user1157
    Jan 16, 2014 at 15:09

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