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Steady State Learning and Nash Equilibrium

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Author Info
Fudenberg, Drew
Levine, David K

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Abstract

The authors study the steady states of a system in which players learn about the strategies their opponents are playing by updating their Bayesian priors in light of their observations. Players are matched.at random to play a fixed extensive-form game and each player observes the realized actions in his own matches but not the intended off-path play of his opponents or the realized actions in other matches. Because players are assumed to live finite lives, there are steady states in which learning continually takes place. If lifetimes are long and players are very patient, the steady state distribution of actions approximates those of a Nash equilibrium. Copyright 1993 by The Econometric Society.

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Publisher Info
Article provided by Econometric Society in its journal Econometrica.

Volume (Year): 61 (1993)
Issue (Month): 3 (May)
Pages: 547-73
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Handle: RePEc:ecm:emetrp:v:61:y:1993:i:3:p:547-73

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Aumann, Robert J, 1987. "Correlated Equilibrium as an Expression of Bayesian Rationality," Econometrica, Econometric Society, vol. 55(1), pages 1-18, January. [Downloadable!] (restricted)
  2. Rubinstein Ariel & Wolinsky Asher, 1994. "Rationalizable Conjectural Equilibrium: Between Nash and Rationalizability," Games and Economic Behavior, Elsevier, vol. 6(2), pages 299-311, March. [Downloadable!] (restricted)
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  3. Tan, Tommy Chin-Chiu & da Costa Werlang, Sergio Ribeiro, 1988. "The Bayesian foundations of solution concepts of games," Journal of Economic Theory, Elsevier, vol. 45(2), pages 370-391, August. [Downloadable!] (restricted)
  4. David Canning, 1989. "Convergence to Equilibrium in a Sequence for Games with Learning," STICERD - Theoretical Economics Paper Series 190, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  5. Bray, Margaret, 1982. "Learning, estimation, and the stability of rational expectations," Journal of Economic Theory, Elsevier, vol. 26(2), pages 318-339, April. [Downloadable!] (restricted)
  6. Kalai, Ehud & Lehrer, Ehud, 1991. "Private-Beliefs Equilibrium," Working Papers 91-19, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
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  7. Kohlberg, Elon & Mertens, Jean-Francois, 1986. "On the Strategic Stability of Equilibria," Econometrica, Econometric Society, vol. 54(5), pages 1003-37, September. [Downloadable!] (restricted)
  8. Brandenburger, Adam & Dekel, Eddie, 1987. "Rationalizability and Correlated Equilibria," Econometrica, Econometric Society, vol. 55(6), pages 1391-1402, November. [Downloadable!] (restricted)
  9. Rosenthal, R W, 1979. "Sequences of Games with Varying Opponents," Econometrica, Econometric Society, vol. 47(6), pages 1353-66, November. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Eric Friedman & Scott Shenker, 1998. "Learning and Implementation on the Internet," Departmental Working Papers 199821, Rutgers University, Department of Economics. [Downloadable!]
  2. repec:bep:theadv:v:4:y:2004:i:1:p:1157-1157 is not listed on IDEAS
    Other versions:
  3. Drew Fudenberg & David K Levine, 2005. "Superstition and Rational Learning," Levine's Working Paper Archive 618897000000000731, David K. Levine. [Downloadable!]
    Other versions:
  4. Phillip M Johnson, 2002. "Essays on Capital Markets: Frictions and Social Forces," Levine's Working Paper Archive 618897000000000052, David K. Levine. [Downloadable!]
  5. Eddie Dekel & Drew Fudenberg & David K. Levine, 1999. "Payoff Information and Self-Confirming Equilibrium," Levine's Working Paper Archive 172, David K. Levine. [Downloadable!]
    Other versions:
  6. Ehud Kalai & Ehud Lehrer, 1990. "Rational Learning Leads to Nash Equilibrium," Discussion Papers 925, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
    Other versions:
  7. Noeth, Markus & Camerer, Colin F. & Plott, Charles R. & Webber, Martin, 1999. "Information Aggregation in Experimental Asset Markets: Traps and Misaligned Beliefs," Working Papers 1060, California Institute of Technology, Division of the Humanities and Social Sciences. [Downloadable!]
  8. Darrell Duffie & Yeneng Sun, 2004. "The Exact Law of Large Numbers for Independent Random Matching," Levine's Bibliography 122247000000000328, UCLA Department of Economics. [Downloadable!]
  9. Matthew Jackson & Ehud Kalai, 1995. "Recurring Bullies," Discussion Papers 1151, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
  10. Georg Noldeke & Larry Samuelson, 1994. "Learning to Signal in Markets," Game Theory and Information 9410001, EconWPA, revised 21 Oct 1994. [Downloadable!]
    Other versions:
  11. Yaron Azrieli, 2009. "On pure conjectural equilibrium with non-manipulable information," International Journal of Game Theory, Springer, vol. 38(2), pages 209-219, June. [Downloadable!] (restricted)
  12. Weibull, Jörgen W., 1997. "What have we learned from Evolutionary Game Theory so far?," Working Paper Series 487, Research Institute of Industrial Economics, revised 26 Oct 1998. [Downloadable!]
    Other versions:
  13. Fabrizio Germano & Gábor Lugosi, 2004. "Global Nash Convergence of Foster and Young's Regret Testing," Economics Working Papers 788, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
    Other versions:
  14. Drew Fudenberg & David K Levine, 2006. "An Economists Perspective on Multi-Agent Learning," Levine's Working Paper Archive 784828000000000683, David K. Levine. [Downloadable!]
  15. Ed Hopkins, 1995. "Learning, Matching and Aggregation," Game Theory and Information 9512001, EconWPA. [Downloadable!]
    Other versions:
  16. Paolo E Giordani & Michele Ruta, 2008. "Prejudice and Immigration," Levine's Bibliography 122247000000002276, UCLA Department of Economics. [Downloadable!]
  17. Eric J Friedman & Scott Schenker, 1997. "Learning and Implementation on the Internet," Levine's Working Paper Archive 595, David K. Levine. [Downloadable!]
  18. Talat Genc, 2007. "A dynamic Cournot–Nash game: a representation of a finitely repeated feedback game," Computational Management Science, Springer, vol. 4(2), pages 141-157, April. [Downloadable!] (restricted)
  19. Mario Gilli, 2002. "Rational Learning in Imperfect Monitoring Games," Working Papers 46, University of Milano-Bicocca, Department of Economics, revised Mar 2002. [Downloadable!]
  20. Francesco Squintani, 1999. "Games with Small Forgetfulness," Discussion Papers 1273, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
  21. Drew Fudenberg & David K Levine, 2007. "Self Confirming Equilibrium and the Lucas Critique," Levine's Working Paper Archive 843644000000000022, David K. Levine. [Downloadable!]
  22. Drew Fudenberg & David K. Levine, 1996. "Consistency and Cautious Fictitious Play," Levine's Working Paper Archive 470, David K. Levine. [Downloadable!]
    Other versions:
  23. Roger Lagunoff, 1995. "On the dynamic selection of mechanisms for provisions of public projects," Discussion Paper / Institute for Empirical Macroeconomics 100, Federal Reserve Bank of Minneapolis. [Downloadable!]
    Other versions:
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