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Correlated equilibrium and behavioural conformity

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Author Info

  • Cartwright, Edward

    (Department of Economics, University of Kent)

  • Wooders, Myrna

    (Department of Economics, University of Warwick)

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 (d, Q)-class games — a game with Q classes of players where all players in the same class are d-substitutes for each other.

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Bibliographic Info

Paper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 732.

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Length: 18 pages
Date of creation: 2005
Date of revision:
Handle: RePEc:wrk:warwec:732

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  1. R. Aumann, 2010. "Correlated Equilibrium as an expression of Bayesian Rationality," Levine's Bibliography 513, UCLA Department of Economics.
  2. Sugden, Robert, 1995. "A Theory of Focal Points," Economic Journal, Royal Economic Society, vol. 105(430), pages 533-50, May.
  3. 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.
  4. Edward Cartwright, 2002. "Learning to play approximate Nash equilibria in games with many players," Levine's Working Paper Archive 506439000000000070, David K. Levine.
  5. Alexander Kovalenkov & Myrna H. Wooders, 1998. "Approximate cores of games and economies with clubs," Working Papers mwooders-00-01, University of Toronto, Department of Economics.
  6. 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.
  7. Aumann, Robert J., 1974. "Subjectivity and correlation in randomized strategies," Journal of Mathematical Economics, Elsevier, vol. 1(1), pages 67-96, March.
  8. Sergiu Hart, 2005. "Adaptive Heuristics," Econometrica, Econometric Society, vol. 73(5), pages 1401-1430, 09.
  9. 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.
  10. 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.
  11. Friedman, Daniel, 1996. "Equilibrium in Evolutionary Games: Some Experimental Results," Economic Journal, Royal Economic Society, vol. 106(434), pages 1-25, January.
  12. Brandenburger, Adam & Dekel, Eddie, 1987. "Rationalizability and Correlated Equilibria," Econometrica, Econometric Society, vol. 55(6), pages 1391-1402, November.
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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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