Research package 1 - Cracking the Code of Bubbles – University of Copenhagen

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Research package 1 - Cracking the Code of Bubbles

The modeling package provides formal logical models of essential bubble ingredients and their dynamics from

  • market types
  • asset concepts
  • investment and returns
  • time horizons
  • investor information
  • knowledge and belief states
  • common knowledge
  • distributed knowledge
  • symmetric and asymmetric information partitions
  • agreement and disagreement
  • pluralistic ignorance
  • bystander effects
  • informational cascades
  • bandwagon effects, etc.

Social proof and related socio- informational phenomena are modeled at a low abstraction level for the models to provide in-depth structural information. These are most appropriate means and have already been successfully applied to

  • Dynamic epistemic logic
  • game theory
  • belief revision theory
  • learning and judgement aggregation theory

Social proof phenomena

The ambition is also to formulate generic formal structures capturing variations of the social proof phenomena. By way of example, bystanders, bandwagons and cascades turn out having similar logical or generic structure albeit treated as unrelated socio-psychological phenomena in the literature.