IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Quantal response equilibria with heterogeneous agents

  • Russell, Golman
Registered author(s):

    This paper introduces a model of quantal response equilibrium with heterogeneous agents and demonstrates the existence of a representative agent for such populations. Except in rare cases, the representative agentʼs noise terms cannot be independently and identically distributed across the set of actions, even if that is assumed for the individual agents. This result demonstrates a fundamental difference between a representative agent and truly heterogeneous quantal responders and suggests that when fitting quantal response specifications to aggregate data from a population of subjects, the noise terms should be allowed to be jointly dependent across actions. Even though this introduces additional degrees of freedom, it makes the model well specified. The representative agent inherits a regular quantal response function from the actual agents, so this model does impose falsifiable restrictions.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Elsevier in its journal Journal of Economic Theory.

    Volume (Year): 146 (2011)
    Issue (Month): 5 (September)
    Pages: 2013-2028

    in new window

    Handle: RePEc:eee:jetheo:v:146:y:2011:i:5:p:2013-2028
    Contact details of provider: Web page:

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as in new window
    1. Nathaniel T Wilcox, 2006. "Theories of Learning in Games and Heterogeneity Bias," Econometrica, Econometric Society, vol. 74(5), pages 1271-1292, 09.
    2. Philip A. Haile & Ali Hortacsu & Grigory Kosenok, 2006. "On the Empirical Content of Quantal Response Equilibrium," Working Papers w0076, Center for Economic and Financial Research (CEFIR).
    3. Hofbauer,J. & Sandholm,W.H., 2003. "Evolution in games with randomly disturbed payoffs," Working papers 20, Wisconsin Madison - Social Systems.
    4. Jacob Goeree & Charles Holt & Thomas Palfrey, 2005. "Regular Quantal Response Equilibrium," Experimental Economics, Springer, vol. 8(4), pages 347-367, December.
    5. R. McKelvey & T. Palfrey, 2010. "Quantal Response Equilibria for Normal Form Games," Levine's Working Paper Archive 510, David K. Levine.
    6. Hofbauer, Josef & Hopkins, Ed, 2005. "Learning in perturbed asymmetric games," Games and Economic Behavior, Elsevier, vol. 52(1), pages 133-152, July.
    7. Ed Hopkins, 1997. "A Note on Best Response Dynamics," ESE Discussion Papers 3, Edinburgh School of Economics, University of Edinburgh.
    8. Drew Fudenberg & David K. Levine, 1996. "The Theory of Learning in Games," Levine's Working Paper Archive 624, David K. Levine.
    9. Simon P. Anderson & Jacob K. Goeree & Charles A. Holt, 2004. "Noisy Directional Learning and the Logit Equilibrium," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(3), pages 581-602, October.
    10. Ed Hopkins, 2001. "Two Competing Models of How People Learn in Games," Levine's Working Paper Archive 625018000000000226, David K. Levine.
    11. Georg Weizsäcker, 2003. "Ignoring the rationality of others: evidence from experimental normal-form games," LSE Research Online Documents on Economics 507, London School of Economics and Political Science, LSE Library.
    12. Rogers, Brian W. & Palfrey, Thomas R. & Camerer, Colin F., 2009. "Heterogeneous quantal response equilibrium and cognitive hierarchies," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1440-1467, July.
    13. Alan Kirman, 2006. "Heterogeneity in Economics," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 1(1), pages 89-117, May.
    14. Cars H. Hommes, 2005. "Heterogeneous Agent Models in Economics and Finance," Tinbergen Institute Discussion Papers 05-056/1, Tinbergen Institute.
    15. TeckH. Ho & Xin Wang & ColinF. Camerer, 2008. "Individual Differences in EWA Learning with Partial Payoff Information," Economic Journal, Royal Economic Society, vol. 118(525), pages 37-59, 01.
    16. Josef Hofbauer & William H. Sandholm, 2002. "On the Global Convergence of Stochastic Fictitious Play," Econometrica, Econometric Society, vol. 70(6), pages 2265-2294, November.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:eee:jetheo:v:146:y:2011:i:5:p:2013-2028. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.