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Vanaf januari geldt een vaste lage prijs voor een groot eerste deel van het gas- en elektraverbruik. Voor het verbruik daarboven moet wél de marktprijs worden betaald. Het gekozen systeem dreigt de energieprijzen nog verder te verhogen.

In this chapter we first give a short overview of Learning to Forecast (LtF) experiments, thereby focusing on the differences between markets with positive and negative expectations feedback. Subsequently, we discuss how the results of these experiments can be used to predict behavior for more complicated market environments that exhibit both types of feedback. In particular, we will consider the case where a futures market is connected with a spot market.

We conduct a Learning to Forecast asset pricing experiment where the market impact of individual forecasts evolves endogenously based on the forecasters' past accuracy. We investigate how endogenous impacts affect price stability and mispricing relative to the fundamental price. Our results suggest that endogenous impacts can destabilize markets when impacts are quite sensitive to forecast accuracy: Price dispersion increases compared to the baseline treatment where impacts are constant and independent of forecast accuracy. On the other hand, mispricing can be reduced when markets are relatively stable and impacts are moderately sensitive to forecast accuracy.

We review a recent literature that shows that interactions between markets, created by the market entry and exit behavior of boundedly rational firms, may cause complex endogenous dynamics. In particular, these models predict that welfare decreases if firms rapidly switch between markets. Against this background, we show that policy makers have the opportunity to stabilize markets and thus to enhance welfare by regulating interacting markets. For instance, imposing profit taxes reduces the markets’ profit differentials and thus slows down the firms’ market entry and exit behavior. However, these stabilization policies may also lead to undesirable side effects, such as coexistence of attractors, hysteresis effects and, in a multi-region setting, failure of policy makers to coordinate on the globally optimal policy. Moreover, regulation may be subject to the lobbying efforts of special interest groups and thus not be optimal.

We study a dynamic oligopoly market model where quantity setting firms can choose one of two production technologies. We find that boundedly rationality in production (best-reply dynamics) and technology choice (evolutionary selection of better performing technologies) as sources of market dynamics, can generate endogenous instability and complicated dynamics, including chaotic fluctuations and co-existing attractors with fractal basins of attraction. By studying successively more complex versions of our model we analyze these two different sources of instability separately and also investigate their interaction. We nd that boundedly rational production decisions amplify technological instability whereas boundedly rational technology decisions do not contribute to the production-driven destabilization of the Nash equilibrium. In any case, whenever the two types of decisions interfere in an endogenously unstable market, fluctuations follow a visibly different pattern compared to the fluctuations of a market with only one source of instability. Finally, we show that an innovation policy that aims to alter the market equilibrium without taking into account o-equilibrium dynamics may, in an intrinsically dynamic world, generate welfare losses by destabilizing a stable equilibrium and/or by raising the amplitude of market fluctuations.

Minority games are a stylized description of strategic situations with both coordination and competition. These games are widely studied using either simulations or laboratory experiments. Simulations can show the dynamics of aggregate behavior, but the results of such simulations depend on the type of strategies used. So far experiments provided little guidance on the type of strategies people use because the set of possible strategies is very large. We therefore use a multi-round strategy method experiment to directly elicit people’s strategies. Between rounds participants can adjust their strategy and test the performance of (possible)new strategies against strategies from the previous round. Strategies gathered in the experiment are subjected to an evolutionary competition. The strategies people use are very heterogeneous although aggregate outcomes resemble the symmetric Nash equilibrium. The strategies that survive evolutionary competition achieve much higher levels of coordination.

We run a laboratory experiment that contributes to the finance literature on "return chasing behavior" studying how investors switch between mutual funds driven by past performance of the funds. The subjects in this experiment make discrete choices between several (2, 3 or 4) experimental funds in multiple periods. The time series of funds' profits are exogenously generated prior to the experiment and subjects are paid for that period according to the profit of the fund they choose. The experimental results show that the investment decision can to a large extent be explained by a discrete choice model ("switching model") with a few lags and a predisposition effect. The intensity of choice parameter \beta in the discrete choice model depends on the structure of the profit time series of the funds, and there is no evidence that it is influenced by experience.

Recent turmoil on global financial markets has led to a discussion on which policy measures should or could be taken to stabilize financial markets. One such a measure that resurfaced is the imposition of short-selling constraints. It is conjectured that these short-selling constraints reduce speculative trading and thereby have the potential to stabilize volatile financial markets. The purpose of the current paper is to investigate this conjecture in a standard asset pricing model with heterogeneous beliefs. We model short-selling constraints by imposing trading costs for selling an asset short. We find that the local stability properties of the fundamental rational expectations equilibrium do not change when trading costs for short-selling are introduced. However, when the asset is overvalued, costs on short-selling increase mispricing and price volatility.

The "catch-up operation on old pesticides" project has resulted in a summary and RIVM conclusion of the environmental aspects of 152 pesticides which were already marketed in the Netherlands before 1975. The RIVM conclusion was subsequently rewritten to form an environmental synopsis. The present report describes the procedure followed and the results obtained in the evaluation of the environmental effects of these chemicals. Pesticides have been evaluated on the basis of the test results submitted with regard to their behaviour in soil and water, their effects on organisms present in the environment, such as birds, aquatic organisms (algae, crustaceans and fish), bees and earthworms, and their bioaccumulation potential. Behaviour in soil concerns the rate and route of conversion of a pesticide and its sorption to soil particles. The risks of leaching to the saturated soil layers and of accumulation in the plough layer one year after application of the chemical have been estimated using the Support Group M model developed for this purpose. Behaviour in water includes the rates of hydrolysis and photolysis, and especially the rate and route of conversion of a pesticide in water/sediment systems. Several proposals have been made for classification systems of environmental properties of pesticides in general. A classification system for persistence in particular is badly needed for the intercomparison of the pesticides. It appeared that various data necessary for the evaluation are still lacking for many pesticides. The report also makes proposals for developing several aspects of the evaluation, such as behaviour in air, risks to terrestrial organisms and risks of biomagnification.

The project "Catch up manoeuvre old pesticides" has resulted in a summary of the environmental aspects of 152 pesticides being marketed in the Netherlands before 1975. In addition to the summary an environmental brieflet was prepared. The underlying report describes the procedure followed and the results obtained in evaluating the environmental impacts of the pesticides. Pesticides are evaluated with respect to their behaviour in soil and in water, effects on organisms in the environment, such as birds, aquatic organisms (algae, crustaceans, and fish), bees, and earth worms, and the bioaccumulating potency. Proposals are put forward for classification systems of some environmental characteristics of pesticides in general. Especially for persistence a classification system is badly needed for a comparison of the pesticides. Carrying out the project several data essentially necessary for the evaluation appeared to be lacking. In the report additional proposals are included to develop the evaluation system for pesticides for example with respect to behaviour in water and air, risk for terrestrial organisms and biomagnification.

This paper stresses the importance of heterogeneity in learning rules. We introduce an evolutionary competition between different learning rules and demonstrate that, though these rules can coexist, their convergence properties are strongly affected by heterogeneity. We consider a Bertrand oligopoly with differentiated goods. Firms do not have full information about the demand structure and they want to maximize their perceived one-period profit by applying one of two different learning rules: OLS learning and gradient learning. We analytically show that the stability of gradient learning depends on the distribution of learning rules over firms. In particular, as the number of gradient learners increases, gradient learning may become unstable. We study evolutionary competition between the learning rules by means of computer simulations and illustrate that this change in stability for gradient learning may lead to cyclical switching between the rules. Stable gradient learning typically gives higher average profit than OLS learning, making firms switch to gradient learning. This however, destabilizes gradient learning which, because of decreasing profits, makes firms switch back to OLS learning. This cycle may repeat itself indefinitely.

We show that incomplete cartels in quantity-setting oligopolies may increase welfare, without any effi ciencies or synergies being internalized by cartel formation. The main intuition is that the cartel has an incentive to contract output and that the firms outside the cartel react to this by expanding output. If the outsiders are more efficient than the cartel firms average production costs go down. Even for relatively moderate differences in efficiency total welfare may increase due to this market-induced rationalization.

We show that incomplete cartels in quantity-setting oligopolies may increase welfare, without any efficiencies or synergies being internalized by cartel formation. The main intuition is that the cartel has an incentive to contract output and that the firms outside the cartel react to this by expanding output. If the outsiders are more efficient than the cartel firms average production costs go down. Even for relatively moderate differences in efficiency total welfare may increase due to this market-induced rationalization.

Recent studies suggest that the type of strategic environment or expectation feedback can have a large impact on whether the market can learn the rational fundamental price. We present an experiment where the fundamental price experiences large unexpected shocks. Markets with negative expectation feedback (strategic substitutes) quickly converge to the new fundamental, while markets with positive expectation feedback (strategic complements) do not converge, but show under-reaction in the short run and over-reaction in the long run. A simple evolutionary selection model of individual learning explains these differences in aggregate outcomes.

We construct an evolutionary version of Theocharis (1960)'s seminal work on the stability of equilibrium in multi-player quantity-setting oligopolies. Two sets of behavioral heuristics are investigated under fixed and endogenously evolving fractions: (myopic) Cournot firms vs. Nash firms and Cournot firms vs. rational firms. The analysis with evolutionary competition between these heuristics nests the famous Theocharis instability threshold, n=3, as a special case and shows that Theocharis' result is quite robust. For evolutionary competition between the Cournot and the rational heuristic, both the existence and the magnitude of this threshold depend on the information costs associated with the rational heuristic. When information costs are positive a bifurcation route to chaos occurs as the number of firms increases. The evolutionary model therefore exhibits perpetual but bounded fluctuations, a feature not present in Theocharis' original model.

We introduce a framework to analyze the interaction of boundedly rational heterogeneous agents repeatedly playing a participation game with negative feedback. We assume that agents use different behavioral rules prescribing how to play the game conditionally on the outcome of previous rounds. We update the fraction of the population using each rule by means of a general class of evolutionary dynamics based on imitation, which contains both replicator and logit dynamics. Our model is analyzed by a combination of formal analysis and numerical simulations and is able to replicate results from the experimental and computational literature on these types of games. In particular, irrespective of the specific evolutionary dynamics and of the exact behavioral rules used, the dynamics of the aggregate participation rate is consistent with the symmetric mixed strategy Nash equilibrium, whereas individual behavior clearly departs from it. Moreover, as the number of players increases the evolutionary dynamics typically becomes unstable and leads to endogenous fluctuations around the steady state. These fluctuations are robust with respect to behavioral rules that try to exploit them.