Myopia and anchoring

Research output: Contribution to journalArticlepeer-review

7 Scopus citations


We develop an equivalence between the equilibrium effects of incomplete information and those of two behavioral distortions: Myopia, or extra discounting of the future; and anchoring of current behavior to past behavior, as in models with habit persistence or adjustment costs. We show how these distortions depend on higher- order beliefs and GE mechanisms, and how they can be disciplined by evidence on expectations. We finally illustrate the use of our toolbox with a quantitative application in the context of inflation, a bridge to the HANK literature, and an extension to networks.

Original languageEnglish (US)
Pages (from-to)1166-1200
Number of pages35
JournalAmerican Economic Review
Issue number4
StatePublished - Apr 2021

ASJC Scopus subject areas

  • Economics and Econometrics


Dive into the research topics of 'Myopia and anchoring'. Together they form a unique fingerprint.

Cite this