AI meets narratives: the state and future of research on expectation formation in economics and sociology

Abstract

This article presents contemporary concepts of economic beliefs in economics and sociology: (a) behavioural accounts; (b) learning; (c) narrative approaches; and (d) Science and Technology Studies-inflected integrative accounts. The review argues that cutting-edge research on expectations in both disciplines has paid insufficient attention to the fact that human agents are supported and partly substituted by modern technology while forming their beliefs. Thus, this article discusses how models, algorithms and artificial intelligence co-determine and profoundly change the theoretical and empirical understanding of expectation formation, and outlines a joint research agenda for studying economic expectations.