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3 - Eliciting Expectations under Laboratory Conditions

Published online by Cambridge University Press:  24 July 2020

Tobias F. Rötheli
Affiliation:
Universität Erfurt, Germany
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Summary

This chapter details the procedures used for eliciting expectations in the laboratory as well as the data gathered. The expectations hypothesis set out here builds on the idea that people extrapolate univariate patterns in time series. The task, therefore, is to capture the general tendencies of extrapolation across different patterns or shapes of the time series. In the following, a pattern will be defined as an ordered sequence of observations over the recent past of an economic time series. The reliance on simple patterns by ordinary people should not be confused with the so-called technical analysis used by professional chartists. If anything, we could refer to humans under everyday conditions as “natural born” chartists.

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Chapter
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The Behavioral Economics of Inflation Expectations
Macroeconomics Meets Psychology
, pp. 22 - 46
Publisher: Cambridge University Press
Print publication year: 2020

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