CRC/TRR 190/1: Biased Beliefs in Dynamic Decisions in Competitive Markets (SP A02)

Project A02 considers dynamic household decisions in labour markets and markets for household finance products. The central research question is to explore the implications of biased beliefs about the relevant market prices on household behaviour and to investigate the consequences for public policy. A recurring theme in the project’s empirical strategies is to connect laboratory experiments with econometric analyses of survey evidence from the new SOEP subsample which contains detailed information about individual’s expectations. In this context, the project will develop new econometric tools to account for selective non-response and measurement error.