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Reaction function |
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Reaction functionThe function specifying the choice of a strategic variable by one economic agent as a function of the choice of another agent. Most familiar specifying output choices of firms in a Cournot duopoly.Similar MatchesOverreaction hypothesisOverreaction hypothesisThe supposition that investors overreact to unanticipated news, resulting in exaggerated movements in stock prices followed by corrections. ReactionReactionA decline in prices following an advance. Opposite of rally. Reaction curveReaction curveThe graph of a reaction function. |
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