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Published online by Cambridge University Press:  09 December 2011

Cars Hommes*
University of Amsterdam
Thomas Lux
University of Kiel, Kiel Institute for the World Economy and Bank of Spain Chair in Computational Economics, University of Castellón
Address correspondence to: Cars Hommes CeNDEF, School of Economics, University of Amsterdam, Valckenierstraat 65-67, 1018 XE Amsterdam, the Netherlands; e-mail:


Models with heterogeneous interacting agents explain macro phenomena through interactions at the micro level. We propose genetic algorithms as a model for individual expectations to explain aggregate market phenomena. The model explains all stylized facts observed in aggregate price fluctuations and individual forecasting behaviour in recent learning-to-forecast laboratory experiments with human subjects (Hommes et al. 2007), simultaneously and across different treatments.

Copyright © Cambridge University Press 2011

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