Cars Hommes holds a Ph-D in Mathematical Economics in 1991 from the University of Groningen and is professor of Economic Dynamics at the University of Amsterdam. In 1998 he obtained a prestigious Pionier-grant from the Netherlands Organization of Scientific Research (NWO) to start the Center for Nonlinear Dynamics in Economics and Finance (CeNDEF), an interdisciplinary research group on complex systems applications in economics and finance. He held visiting positions at University of Wisconsin, Stanford University and New York University.

CH is particularly well known from his influential work with William Brock (University of Wisconsin, USA), developing a behavioral theory of heterogeneous expectations and its applications to economics and finance. The CeNDEF group has tested the heterogeneous expectations hypothesis empirical and in laboratory experiments and CH is one of the pioneers in Experimental Macroeconomics. CH is INET grantee for a project on Heterogeneous Expectations and Financial Crisis (HExFiCs) and in the INEXC network on expectational coordination(www.expectational- .

CH has published more than 100 articles, has been Editor of the Journal of Economic Dynamics and Control 2002-2012 and currently is member of five editorial boards of international journals. He is the author of the recent book Behavioral Rationality and Heterogeneous Expectations in Complex Economic Systems, Cambridge University Press, 2013 and winner of the Distinguished Lorentz Fellowship 2014 in the Netherlands for his interdisciplinary research.

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Reflexivity, expectations feedback and almost self-fulfilling equilibria: economic theory, empirical evidence and laboratory experiments

Paper Conference paper | | Apr 2015

We discuss recent work on bounded rationality and learning in relation to Soros’ principle of reflexivity and stress the empirical importance of non-rational, almost self-fulfilling equilibria in positive feedback systems.

Market Psychology, Animal Spirits and Reflexivity

Paper Conference paper | | Apr 2013

Neoclassical economics has abolished the role of psychology in decision making by assuming that all individuals are rational optimizers with rational expectations about future events.

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INET funded research articles are cited in The Conversation

News Feb 24, 2021

Two separate INET funded research articles are cited; first from Schularick, Jordà, & Taylor on leveraged bubbles followed by Bao, Hommes, & Makarewicz on bubble formation. “Since their inception, financial markets, and to a lesser extent some real markets, have been subject to bubbles. … More recently, stock prices, but also credit, real estate, commodities, bond markets, and famously, bitcoin, are all assets that have experienced bubble episodes. Regarding cryptocurrencies, many economists also defend a permanent bubble, their fundamental value being theoretically non-existent.” …. In fact, the presence of bubbles in the markets (financial and real) seems to stem from the persistent behavior of economic agents. Experimental studies, controlling exactly the actual value, showed that participants tended to set up a bubble-like operation, with price surges and collapses very similar to real economy situations, and in no way related to a change in the market.

How Expectations Interact to Create Bubbles

Video | Nov 5, 2012

How do economists make their models work? By assuming that investors have rational expectations and that every market participant is alike. However, things quickly get messy once economists start to acknowledge that people are different, interact with each other, and change heuristic forecasting strategies based on recent performance.