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Analogy-Based Expectation Equilibrium Author info | Abstract | Publisher info | Download info | Related research | Statistics Philippe Jeniel () (Paris-Jourdan Sciences Économiques (PSE), École Normale Supérieur)
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It is assumed that players bundle nodes in which other players must move into analogy classes, and players only have expectations about the average behavior in every class. A solution concept is proposed for multi-stage games with perfect information: at every node players choose best-responses to their analogy-based expectations, and expectations are correct on average over those various nodes pooled together into the same analogy classes. The approach is applied to a variety of games. It is shown that a player may benefit from having a coarse analogy partitioning. And for simple analogy partitioning, (1) initial cooperation followed by an end opportunistic behavior may emerge in the finitely repeated prisoner's dilemma (or in the centipede game), (2) an agreement need not be reached immediately in bargaining games with complete information.
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Paper provided by Institute for Advanced Study, School of Social Science in its series Economics Working Papers with number
0003.
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Length: 38 pages
Date of creation: Mar 2001Date of revision:
Publication status: Published in Journal of Economic Theory 123 (2005) 81-104Handle: RePEc:ads:wpaper:0003Contact details of provider: Postal: Einstein Drive,Princeton, NJ 08540 Phone: 609-734-8250 Fax: 609-951-4457 Web page: http://www.sss.ias.edu/ More information through EDIRC
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Keywords: Game theory bounded rationality reasoning by analogy Other versions of this item:
Find related papers by JEL classification: C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
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Levine's Bibliography
784828000000000106, UCLA Department of Economics.
[Downloadable!]
Other versions:
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"Analogy-Based Expectation Equilibrium ,"
Economics Working Papers
0003, Institute for Advanced Study, School of Social Science.
[Downloadable!] Jehiel, Philippe, 2005.
"Analogy-based expectation equilibrium ,"
Journal of Economic Theory ,
Elsevier, vol. 123(2), pages 81-104, August.
[Downloadable!] (restricted) Ran Spiegler, 2001.
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