Correlated equilibrium and behavioural conformity
Cartwright, Edward and Wooders, Myrna Holtz (2004) Correlated equilibrium and behavioural conformity. Working Paper. Coventry: University of Warwick, Department of Economics. Warwick economic research papers (No.732).
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Is conformity amongst similar individuals consistent with self-interested behavior? We consider a model of incomplete information in which each player receives a signal, interpreted as an allocation to a role, and can make his action choice conditional on his role. Our main result demonstrates that `near to' any correlated equilibrium is an approximate correlated equilibrium `with conformity' -- that is, an equilibrium where all `similar players' play the same strategy, have the same probability of being allocated to each role, and receive approximately the same payoff; in short, similar players `behave in an identical way' and are treated nearly equally. To measure `similarity' amongst players we introduce the notions of approximate substitutes and a (delta,Q)-class games -- a game with Q classes of players where all players in the same class are delta-substitutes for each other.
|Item Type:||Working or Discussion Paper (Working Paper)|
|Subjects:||H Social Sciences > HB Economic Theory|
|Divisions:||Faculty of Social Sciences > Economics|
|Library of Congress Subject Headings (LCSH):||Game theory, Information asymmetry, Choice (Psychology), Equilibrium (Economics), Statistical decision|
|Series Name:||Warwick economic research papers|
|Publisher:||University of Warwick, Department of Economics|
|Place of Publication:||Coventry|
|Official Date:||November 2004|
|Number of Pages:||18|
|Status:||Not Peer Reviewed|
|Access rights to Published version:||Open Access|
This paper is a major revision of Cartwright and Wooders (2003a)
 Aumann R.J. (1974): “Subjectivity and correlation in randomized strategies”, Journal of Mathematical Economics 1, 67-96.
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