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Correlated equilibrium and behavioural conformity

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  • Cartwright, Edward

    (Department of Economics, University of Kent)

  • Wooders, Myrna

    (Department of Economics, University of Warwick)

Abstract

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 (d, Q)-class games — a game with Q classes of players where all players in the same class are d-substitutes for each other.

Suggested Citation

  • Cartwright, Edward & Wooders, Myrna, 2005. "Correlated equilibrium and behavioural conformity," The Warwick Economics Research Paper Series (TWERPS) 732, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:732
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    Cited by:

    1. Edward Cartwright & Myrna Wooders, 2008. "Behavioral Properties of Correlated Equilibrium; Social Group Structures with Conformity and Stereotyping," Vanderbilt University Department of Economics Working Papers 0814, Vanderbilt University Department of Economics.
    2. Azrieli, Yaron, 2009. "Categorizing others in a large game," Games and Economic Behavior, Elsevier, vol. 67(2), pages 351-362, November.

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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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