Experiments on heterogeneous expectations and switching behavior

Expectation formation plays a central role in dynamic models in modern macroeconomics and finance. This thesis studies expectation formation in dynamic market experiments. One feature that differentiates this thesis from the current mainstream literature is that we apply the heterogeneous expectations framework instead of the traditional representative agent framework assuming rational expectations. We study interaction of individual forecasting behavior in different types of expectations feedback systems, compare the situation where expectations are directly translated into computed optimal economic decisions with the situation where agents solve the optimization problem themselves and finally, we study switching behavior and apply the switching model to mutual fund choice, where people make dynamic choices between different mutual funds.