Adaptive Expectations
Adaptive expectations is an economic theory that suggests people form their expectations about the future based on their past experiences. This theory is used to explain how people make decisions in the present based on their expectations of the future. It is based on the idea that people learn from their past experiences and use this information to make decisions in the present. The theory suggests that people’s expectations are constantly changing and adapting to new information.
History of Adaptive Expectations
The concept of adaptive expectations was first introduced by John Muth in 1961. Muth argued that people’s expectations are based on their past experiences and that these expectations are constantly changing and adapting to new information. He argued that people’s expectations are not static, but rather they are constantly changing and adapting to new information. This theory has been used to explain how people make decisions in the present based on their expectations of the future.
Comparison Table
| Expectation | Adaptive | Rational |
|---|---|---|
| Formation | Past experiences | Future predictions |
| Change | Adapts to new information | Static |
Summary
Adaptive expectations is an economic theory that suggests people form their expectations about the future based on their past experiences. This theory is used to explain how people make decisions in the present based on their expectations of the future. It is based on the idea that people learn from their past experiences and use this information to make decisions in the present. For more information about adaptive expectations, you can visit websites such as Investopedia and The Balance.
See Also
- Rational Expectations
- Expectation Formation
- Expectation Theory
- Adaptive Learning
- Adaptive Control
- Adaptive Systems
- Adaptive Behavior
- Adaptive Management
- Adaptive Planning
- Adaptive Leadership
