808. A consistent representation of Keynes's long-term expectation in financial markets

Marcello Basili

DEPS,USiena

Alain Chateauneuf

IPAG Business School Paris and PSE-CES University of Paris-I

Giuseppe Scianna

DIISM, USiena

Abstract

This paper advances an intuitive representation of Keynes's notion of long-term expectation. We introduce the epsilon-contamination approach and represent the conventional judgment by the Steiner point of agents' common probability set. We anticipate a change in conventional judgment by updating the Steiner point.