About

Francesca Bastianello’s research explores questions at the intersection of asset pricing, corporate finance, and behavioral economics. She studies how people reason and form beliefs, and how biased expectations shape financial and macroeconomic outcomes. To do so, she uses a broad range of tools, ranging from tractable models of belief formation, to experiments, to new approaches for collecting novel data from text.

Research topics

• Econometrics
• Economics
• Applied mathematics
• Thermodynamics
• Keynesian economics
• Statistics
• Microeconomics
• Physics
• Statistical physics
• Mathematics
• Mathematical economics

Selected publications

• Biases in Belief Updating Within and Across Domains

  SSRN Electronic Journal · 2026-01-01

  preprintOpen access1st authorCorresponding
  PublisherDOI

• Expectations and Learning from Prices

  The Review of Economic Studies · 2024 · 26 citations

  1st authorCorresponding
  • Economics
  • Keynesian economics
  • Econometrics

  Abstract We study mislearning from equilibrium prices, and contrast this with mislearning from exogenous fundamentals. We micro-found mislearning from prices with a psychologically founded theory of “Partial Equilibrium Thinking” (PET), where traders learn fundamental information from prices, but fail to realize others do so too. PET leads to over-reaction, and upward sloping demand curves, thus contributing to more inelastic markets. The degree of individual-level over-reaction and the extent of inelasticity vary with the composition of traders, and with the informativeness of new information. More generally, unlike mislearning from fundamentals, mislearning from prices (i) generates a two-way feedback between prices and beliefs that can provide an arbitrarily large amount of amplification and (ii) can rationalize both over-reaction and more inelastic markets. The two classes of biases are not mutually exclusive. Instead, they interact in very natural ways, and mislearning from prices can vastly amplify mislearning from fundamentals.

  PublisherDOI

• Partial Equilibrium Thinking, Extrapolation, and Bubbles

  SSRN Electronic Journal · 2023 · 15 citations

  1st authorCorresponding
  • Mathematical economics
  • Mathematics
  • Econometrics
  PublisherDOI

• Partial Equilibrium Thinking in General Equilibrium

  SSRN Electronic Journal · 2019-01-01 · 6 citations

  articleOpen access1st authorCorresponding
  PublisherDOI

Frequent coauthors

• Paul Fontanier

  Yale University

  3 shared

Awards & honors

• Distinguished Alumni Award