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Learning and Belief-Based Trade

Author

Listed:
  • Drew Fudenberg
  • David K Levine

Abstract

We use the theory of learning in games to show that no-trade results do not require that gains from trade are common knowledge nor that play is a Nash Equilibrium.

Suggested Citation

  • Drew Fudenberg & David K Levine, 2005. "Learning and Belief-Based Trade," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 42(126), pages 199-208.
    • Handle: RePEc:ioe:cuadec:v:42:y:2005:i:126:p:199-208
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    File URL: http://www.economia.uc.cl/docs/126fudea.pdf
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    References listed on IDEAS

    as
    1. Fudenberg, Drew & Levine, David K., 1995. "Consistency and cautious fictitious play," Journal of Economic Dynamics and Control, Elsevier, vol. 19(5-7), pages 1065-1089.
    2. Kreps, David M., 1977. "A note on "fulfilled expectations" equilibria," Journal of Economic Theory, Elsevier, vol. 14(1), pages 32-43, February.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Bond, Philip & Eraslan, Hülya, 2010. "Information-based trade," Journal of Economic Theory, Elsevier, vol. 145(5), pages 1675-1703, September.
    2. Felipe Zurita, 2005. "Beyond Earthquakes: The New Directions of Expected Utility Theory," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 42(126), pages 209-255.
    3. Philip Bond & Hulya Eraslan, 2007. "Information-based trade," Levine's Bibliography 122247000000001689, UCLA Department of Economics.
    4. Daron Acemoglu & Victor Chernozhukov & Muhamet Yildiz, 2006. "Learning and Disagreement in an Uncertain World," NBER Working Papers 12648, National Bureau of Economic Research, Inc.
    5. Felipe Zurita, 2004. "Essays on Speculation," Levine's Working Paper Archive 618897000000000849, David K. Levine.
    6. Felipe Zurita, 2009. "La Economía Financiera Frente a la Crisis," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 46(134), pages 183-195.

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    More about this item

    Keywords

    No-Trade Theorem; Common Knowledge; Learning; Self-Confirming Equilibria; Marginal Best-Response Distribution;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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