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Learning in extensive-form games I. Self-confirming equilibria

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  • Fudenberg, Drew
  • Kreps, David M.

Abstract

A group of individuals repeatedly plays a fixed extensive-form game, using past play to forecast future actions. Each (asymptotically) maximizes his own immediate expected payoff, believing that others' play corresponds to the historical frequencies of past play. Because players observe only the path of play in each round, they may not learn how others act in parts of the game tree that are not reached infinitely often. Hence, differences and correlations in beliefs about out-of-equilibrium actions may persist indefinitely. The stable points of these learning processes are self-confirming equilibria, a weaker solution concept than Nash equilibria. Journal of Economic Literature Classification Numbers: C72, D83.

Suggested Citation

  • Fudenberg, Drew & Kreps, David M., 1995. "Learning in extensive-form games I. Self-confirming equilibria," Games and Economic Behavior, Elsevier, vol. 8(1), pages 20-55.
    • Handle: RePEc:eee:gamebe:v:8:y:1995:i:1:p:20-55
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    References listed on IDEAS

    as
    1. Fudenberg Drew & Kreps David M., 1993. "Learning Mixed Equilibria," Games and Economic Behavior, Elsevier, vol. 5(3), pages 320-367, July.
    2. Fudenberg, Drew & Levine, David K, 1993. "Self-Confirming Equilibrium," Econometrica, Econometric Society, vol. 61(3), pages 523-545, May.
    3. Kalai, Ehud & Lehrer, Ehud, 1995. "Subjective games and equilibria," Games and Economic Behavior, Elsevier, vol. 8(1), pages 123-163.
    4. Kalai, Ehud & Lehrer, Ehud, 1993. "Rational Learning Leads to Nash Equilibrium," Econometrica, Econometric Society, vol. 61(5), pages 1019-1045, September.
    5. Aumann, Robert J, 1987. "Correlated Equilibrium as an Expression of Bayesian Rationality," Econometrica, Econometric Society, vol. 55(1), pages 1-18, January.
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    7. Kreps, David M., 1990. "Game Theory and Economic Modelling," OUP Catalogue, Oxford University Press, number 9780198283812, Decembrie.
    8. Fudenberg, Drew & Levine, David K, 1993. "Steady State Learning and Nash Equilibrium," Econometrica, Econometric Society, vol. 61(3), pages 547-573, May.
    9. Kalai, Ehud & Lehrer, Ehud, 1993. "Subjective Equilibrium in Repeated Games," Econometrica, Econometric Society, vol. 61(5), pages 1231-1240, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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