International Robust Disagreement
Riccardo Colacito, Mariano M. Croce
American Economic Review · 2012 · Volume 102 · Issue 3
Abstract
We characterize the equilibrium of a two-country, two-good economy in which agents have opposite preference bias toward one of the two consumption goods and fear model misspecification. We document that disagreement about endowments' growth prospects is a persistent endogenous outcome of this class of economies.
Keywords
Consumer Economics: Theory, Criteria for Decision-Making under Risk and Uncertainty, Search, Learning, Information and Knowledge, Communication, Belief
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