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Rationalizable partition-confirmed equilibrium with heterogeneous beliefs

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  • Fudenberg, Drew
  • Kamada, Yuichiro

Abstract

Many models of learning in games implicitly or explicitly assume there are many agents in the role of each player. In principle this allows different agents in the same player role to have different beliefs and play differently, and this is known to occur in laboratory experiments. To explore the impact of this heterogeneity, along with the idea that subjects use their information about other players' payoffs, we define rationalizable partition-confirmed equilibrium (RPCE). We provide several examples to highlight the impact of heterogeneous beliefs, and show how mixed strategies can correspond to heterogeneous play in a large population. We also show that every heterogeneous-belief RPCE can be approximated by a RPCE in a model where every agent in a large pool is a separate player.

Suggested Citation

  • Fudenberg, Drew & Kamada, Yuichiro, 2018. "Rationalizable partition-confirmed equilibrium with heterogeneous beliefs," Games and Economic Behavior, Elsevier, vol. 109(C), pages 364-381.
    • Handle: RePEc:eee:gamebe:v:109:y:2018:i:c:p:364-381
    DOI: 10.1016/j.geb.2017.12.021
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    References listed on IDEAS

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    Cited by:

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    3. Battigalli, P. & Catonini, E. & Lanzani, G. & Marinacci, M., 2019. "Ambiguity attitudes and self-confirming equilibrium in sequential games," Games and Economic Behavior, Elsevier, vol. 115(C), pages 1-29.
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    5. Fudenberg, Drew & He, Kevin, 2020. "Payoff information and learning in signaling games," Games and Economic Behavior, Elsevier, vol. 120(C), pages 96-120.
    6. Clark, Daniel & Fudenberg, Drew & He, Kevin, 2022. "Observability, dominance, and induction in learning models," Journal of Economic Theory, Elsevier, vol. 206(C).

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    More about this item

    Keywords

    Rationalizability; Extensive-form games; Self-confirming equilibrium; Heterogeneous beliefs; Purification; Random matching;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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