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Conditional Universal Consistency

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  • Drew Fudenberg
  • David K. Levine

Abstract

Players choose an action before learning an outcome chosen according to an unknown and history-dependent stochastic rule. Procedures that categorize outcomes, and use a randomized variation on fictitious play within each category are studied. These procedures are “conditionally consistent:†they yield almost as high a time-average payoff as if the player knew the conditional distributions of actions given categories. Moreover, given any alternative procedure, there is a conditionally consistent procedure whose performance is no more than epsilon worse regardless of the discount factor. We also discuss cycles, and argue that the time-average of play should resemble a correlated equilibrium.
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Suggested Citation

  • Drew Fudenberg & David K. Levine, 1997. "Conditional Universal Consistency," Levine's Working Paper Archive 471, David K. Levine.
    • Handle: RePEc:cla:levarc:471
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    References listed on IDEAS

    as
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