Strategic interactions, incomplete information and learning
AbstractIn a model of incomplete, heterogeneous information, with externalities and strategic interactions, we analyze the possibility for learning to act as coordination device. We build on the framework proposed by Angeletos and Pavan (2007) and extend it to a dynamic multiperiod setting where agents need to learn to coordinate. We analyze conditions under which adaptive and eductive learning obtain, and show that adaptive learning conditions are less demanding than the eductive ones: in particular, when actions are strategic substitutes, the equilibrium is always adaptively learnable, while it might not be eductively so. In case of heterogeneous preferences, moreover, convergence only depends on the average characteristic of agents in the economy. We also show that adaptive learning dynamics converge to the game theoretical strategic equilibrium, which means that agents can learn to act strategically in a simple and straightforward way.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 38651.
Date of creation: 06 May 2012
Date of revision:
Learning; heterogeneity; interaction; coordination;
Other versions of this item:
- Michele Berardi, 2011. "Strategic interactions, incomplete information and learning," Centre for Growth and Business Cycle Research Discussion Paper Series 157, Economics, The Univeristy of Manchester.
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-15 (All new papers)
- NEP-CSE-2012-05-15 (Economics of Strategic Management)
- NEP-CTA-2012-05-15 (Contract Theory & Applications)
- NEP-EVO-2012-05-15 (Evolutionary Economics)
- NEP-GTH-2012-05-15 (Game Theory)
- NEP-MIC-2012-05-15 (Microeconomics)
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