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The Dynamic Evolution of Preferences

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  • Aviad Heifetz
  • Chris Shannon
  • Yossi Spiegel

Abstract

This paper develops a general methodology for characterizing the dynamic evolution of preferences in a wide class of strategic interactions. We give simple conditions characterizing the limiting distribution of preferences in general games, and apply our results to study the evolutionary emergence of overconfidence and interdependent preferences. We also show that this methodology can be adapted to cases where preferences are only imperfectly observed.
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Suggested Citation

  • Aviad Heifetz & Chris Shannon & Yossi Spiegel, 2007. "The Dynamic Evolution of Preferences," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 32(2), pages 251-286, August.
    • Handle: RePEc:spr:joecth:v:32:y:2007:i:2:p:251-286
    DOI: 10.1007/s00199-006-0121-7
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    More about this item

    Keywords

    Evolution of preferences; Evolutionary stability; Overconfidence; Interdependent preferences; C72; D01;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles

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