In the extended working paper version of AH 12, Akerlof and Holden (2007) provide some results for heterogeneous agents.
As we show below, however, a different set of coefficients enters the stage for heterogeneous agents.
s] when agents are heterogeneous, and this assumption enables the firm to make a positive profit even then and ensures that, for weakly heterogeneous agents, the firm will prefer to implement an equilibrium with all n agents participating.
We assume n heterogeneous agents with exponential utility and we suppress the index for each agent hereafter.
In this simple model the intensity of exit is the same across heterogeneous agents.
The key conclusion of this simple model of heterogeneous agents is that under the existence of organized markets and convergence of beliefs, investor heterogeneity does not have a significant impact and the intensity of the process of the number of scrapped vessels remains multiplicative in the number of agents.
Oil Price Dynamics: A Behavioral Finance Approach with Heterogeneous Agents.
Earlier versions of this article have been presented at the conference Rethinking Economic Policies in a Landscape of Heterogeneous Agents, Universite Cattolica del Sacro Cuore, Milano, October 13-15, 2011; the workshop Complex Systems: Towards a Better Understanding of Financial Stability and Crises, De Nederlandsche Bank, Amsterdam.
However, our analysis with heterogeneous agents does not go so far as to justify the use of an expansionary monetary policy.
Thus far, we have argued that the Friedman rule ceases to remain unambiguously optimal once the standard representative-agent paradigm is replaced with an environment with heterogeneous agents.