von Hagen, Jürgen Kube, Sebastian Kaiser, Johannes Selten, Reinhard Pope, Robin
Year of Publication:
Bonn Econ Discussion Papers 29/2006
In the decision-making process, there is a stage when choosers evaluate alternatives. Evaluation is complex especially when it involves the future exchange rate. In the complexity of predicting the future exchange rate, choosers may use prominent numbers and ratios. We furnish field and experimental evidence of major effects on exchange rate determination from prominent numbers and ratios that constitute nominal equalities and historical benchmarks. Theorizing and estimation of exchange rates can be enhanced via SKAT, the Stages of Knowledge Ahead Theory that allows prominent numbers and prominent ratios to be taken into account consistently in constructing decision models.
nominalism money illusion unpredictability experiment SKAT the Stages of Knowledge Ahead Theory prominent numbers prominent ratios