@article{556,
  author = {Markus Brunnermeier and Alp Simsek and Wei Xiong},
  title = {A Welfare Criterion for Models with Biased Beliefs},
  abstract = { <p>This paper proposes a welfare criterion for economies in which agents have heterogeneously distorted beliefs. Instead of taking a stand on whose belief is correct, our criterion asserts an allocation to be belief-neutral inefficient if it is inefficient under any convex combination of agents{\textquoteright} beliefs. While this criterion gives an incomplete ranking of social allocations, it can identify negative-sum speculation in a broad range of prominent models with distorted beliefs.</p> },
  year = {2014},
  journal = {Quarterly Journal of Economics},
  volume = {129},
  pages = {1711-1752},
  language = {eng},
}