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Heterogeneous Beliefs and Local Information in Stochastic Fictitious Play

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  • Drew Fudenberg
  • Satoru Takahashi

Abstract

Stochastic fictitious play (SFP) assumes that agents do not try to influence the future play of their current opponents, an assumption that is justified by appeal to a setting with a large population of players who are randomly matched to play the game. However, the dynamics of SFP have only been analyzed in models where all agents in a player role have the same beliefs. We analyze the dynamics of SFP in settings where there is a population of agents who observe only outcomes in their own matches and thus have heterogeneous beliefs. We provide conditions that ensure that the system converges to a state with homogeneous beliefs, and that its asymptotic behavior is the same as with a single representative agent in each player role.

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Paper provided by David K. Levine in its series Levine's Working Paper Archive with number 122247000000001695.

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Date of creation: 31 Dec 2008
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Handle: RePEc:cla:levarc:122247000000001695

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Citations

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Cited by:
  1. Mohlin, Erik, 2010. "Evolution of Theories of Mind," Working Paper Series in Economics and Finance 0728, Stockholm School of Economics, revised 12 May 2010.
  2. Ratul, Lahkar, 2011. "The dynamic instability of dispersed price equilibria," Journal of Economic Theory, Elsevier, vol. 146(5), pages 1796-1827, September.
  3. Lahkar, Ratul & Seymour, Robert M., 2013. "Reinforcement learning in population games," Games and Economic Behavior, Elsevier, vol. 80(C), pages 10-38.

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