TY - JOUR U1 - Wissenschaftlicher Artikel A1 - Herzog, Bodo T1 - Dynamic expectation theory: insights for market participants JF - Journal of risk and financial management : JRFM N2 - This paper develops a new methodology in order to study the role of dynamic expectations. Neither reference-point theories nor feedback models are sufficient to describe human expectations in a dynamic market environment. We use an interdisciplinary approach and demonstrate that expectations of non-learning agents are time-invariant and isotropic. On the contrary, learning enhances expectations. We uncover the “yardstick of expectations” in order to assess the impact of market developments on expectations. For the first time in the literature, we reveal new insights about the motion of dynamic expectations. Finally, the model is suitable for an AI approach and has major implications on the behaviour of market participants. KW - expectation theory KW - information theory KW - risk management KW - financial dynamics KW - neuroeconomics Y1 - 2019 UN - https://nbn-resolving.org/urn:nbn:de:bsz:rt2-opus4-24291 SN - 1911-8066 SS - 1911-8066 U6 - https://doi.org/10.3390/jrfm12020077 DO - https://doi.org/10.3390/jrfm12020077 VL - 12 IS - 2 SP - 1 EP - 14 S1 - 14 PB - MDPI CY - Basel ER -