Learning in Mis-Specified Models and the Possibility of Cycles
Nyarko, Y. (1991). Learning in Mis-Specified Models and the Possibility of Cycles. Journal of Economic Theory, 55(2), 416-427.
I study the problem of a monopolist maximizing a sum of discounted profits facing a linear demand curve whose slope and intercept are unknown. I show that if the monopolist has a mis-specified model…