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Correlated Equilibrium and Behavioral Conformity

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  • Edward Cartwright

    ()
    (Department of Economics, Keynes College, University of Kent)

  • Myrna Wooders

    ()
    (Department of Economics, Vanderbilt University)

Abstract

Is conformity amongst similar individuals consistent with self-interested behavior? We consider a model of incomplete information in which each player receives a signal, interpreted as an allocation to a role, and can make his action choice conditional on his role. Our main result demonstrates that 'near to' any correlated equilibrium is an approximate correlated equilibrium 'with conformity' -- that is, an equilibrium where all 'similar players' play the same strategy, have the same probability of being allocated to each role, and receive approximately the same payoff; in short, similar players 'behave in an identical way' and are treated nearly equally. To measure 'similarity' amongst players we introduce the notions of approximate substitutes and a (delta,Q)-class games -- a game with Q classes of players where all players in the same class are delta-substitutes for each other.

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Paper provided by Vanderbilt University Department of Economics in its series Vanderbilt University Department of Economics Working Papers with number 0526.

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Date of creation: Nov 2005
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Handle: RePEc:van:wpaper:0526

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Web page: http://www.vanderbilt.edu/econ/wparchive/index.html

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  1. Aumann, Robert J., 1974. "Subjectivity and correlation in randomized strategies," Journal of Mathematical Economics, Elsevier, vol. 1(1), pages 67-96, March.
  2. Edward Cartwright, 2004. "Learning to Play Approximate Nash Equilibria in Games with Many Players," Working Papers 2004.85, Fondazione Eni Enrico Mattei.
  3. Alexander Kovalenkov & Myrna Holtz Wooders, 2000. "Approximate Cores of Games and Economies with Clubs," Econometric Society World Congress 2000 Contributed Papers 1790, Econometric Society.
  4. Sergiu Hart, 2004. "Adaptive Heuristics," Levine's Bibliography 122247000000000471, UCLA Department of Economics.
  5. Robert J. Aumann, 2010. "Correlated Equilibrium as an expression of Bayesian Rationality," Levine's Working Paper Archive 661465000000000377, David K. Levine.
  6. Shaun Hargreaves-Heap & Yanis Varoufakis, 2002. "Some Experimental Evidence On The Evolution Of Discrimination, Co--Operation And Perceptions Of Fairness," Economic Journal, Royal Economic Society, vol. 112(481), pages 679-703, July.
  7. Wooders, Myrna & Edward Cartwright & Selten, Reinhard, 2002. "Social Conformity And Equilibrium In Pure Strategies In Games With Many Players," The Warwick Economics Research Paper Series (TWERPS) 636, University of Warwick, Department of Economics.
  8. Friedman, Daniel, 1996. "Equilibrium in Evolutionary Games: Some Experimental Results," Economic Journal, Royal Economic Society, vol. 106(434), pages 1-25, January.
  9. Brandenburger, Adam & Dekel, Eddie, 1987. "Rationalizability and Correlated Equilibria," Econometrica, Econometric Society, vol. 55(6), pages 1391-1402, November.
  10. Van Huyck, John B & Battalio, Raymond C & Rankin, Frederick W, 1997. "On the Origin of Convention: Evidence from Coordination Games," Economic Journal, Royal Economic Society, vol. 107(442), pages 576-96, May.
  11. Sugden, Robert, 1995. "A Theory of Focal Points," Economic Journal, Royal Economic Society, vol. 105(430), pages 533-50, May.
  12. Rapoport, Amnon & Seale, Darryl A. & Winter, Eyal, 2002. "Coordination and Learning Behavior in Large Groups with Asymmetric Players," Games and Economic Behavior, Elsevier, vol. 39(1), pages 111-136, April.
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Cited by:
  1. Edward Cartwright & Myrna Wooders, 2008. "Behavioral Properties of Correlated Equilibrium; Social Group Structures with Conformity and Stereotyping," Vanderbilt University Department of Economics Working Papers 0814, Vanderbilt University Department of Economics.

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