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Rational Learning Leads to Nash Equilibrium

  • Kalai, Ehud
  • Lehrer, Ehud

Subjective utility maximizers, in an infinitely repeated game, will learn to predict opponents' future strategies and will converge to play according to a Nash equilibrium of the repeated game. Players' initial uncertainty is placed directly on opponents' strategies and the above result is obtained under the assumption that the individual beliefs are compatible with the chosen strategies. An immediate corollary is that, when playing a Harsanyi-Nash equilibrium of a repeated game of incomplete information about opponents' payoff matrices, players will eventually play a Nash equilibrium of the real game, as if they had complete information. Copyright 1993 by The Econometric Society.

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Article provided by Econometric Society in its journal Econometrica.

Volume (Year): 61 (1993)
Issue (Month): 5 (September)
Pages: 1019-45

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Handle: RePEc:ecm:emetrp:v:61:y:1993:i:5:p:1019-45
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  3. Kalai, Ehud & Lehrer, Ehud, 1993. "Subjective Equilibrium in Repeated Games," Econometrica, Econometric Society, vol. 61(5), pages 1231-40, September.
  4. Kalai, Ehud & Lehrer, Ehud, 1994. "Weak and strong merging of opinions," Journal of Mathematical Economics, Elsevier, vol. 23(1), pages 73-86, January.
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  15. Lawrence Blume & David Easley, 1993. "Rational Expectations and Rational Learning," Game Theory and Information 9307003, EconWPA.
  16. Drew Fudenberg & David K. Levine, 1993. "Steady State Learning and Nash Equilibrium," Levine's Working Paper Archive 373, David K. Levine.
  17. Monderer Dov & Samet Dov, 1995. "Stochastic Common Learning," Games and Economic Behavior, Elsevier, vol. 9(2), pages 161-171, May.
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  19. Woodford, Michael, 1986. "Learning to Believe in Sunspots," Working Papers 86-16, C.V. Starr Center for Applied Economics, New York University.
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  23. Blume, L. E. & Bray, M. M. & Easley, D., 1982. "Introduction to the stability of rational expectations equilibrium," Journal of Economic Theory, Elsevier, vol. 26(2), pages 313-317, April.
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