Michael Pereleman writes: >rational expectations comes directly out of the server mechanisms that the gunners used.<
are you sure? the RatEx theory simply says that on average the expected value of a number (say, the price level) equals the equilibrium value of that number, so that P(expected) = P* + e, where P* is the equilibrium and e is a random error term. Is there an "equilibrium" in gunnery? wouldn't it be more accurate to say that _adaptive_ expectations comes out of gunnery, since adaptive exp. involves partial adjustment or error correction? (I don't know anything about using cannons, but don't they shoot, then adjust for perceived misses, then shoot, etc.?) jd
