Rational Learning Leads to Nash Equilibrium
Each of n players, in an infinitely repeated game, starts with subjective beliefs about his opponents' strategies. If the individual beliefs are compatible with the true strategies chose, then Bayesian updating will lead in the long run to accurate prediction of the future of play of the game. It follows that individual players, who know their own payoff matrices and choose strategies to maximize their expected utility, must eventually play according to a Nash equilibrium of the repeated game. An immediate corollary is that, when playing a Harsanyi-Nash equilibrium of a repeated game of incomplete information about opponents' payoff matrices, players will eventually play a Nash equilibrium of the real game, as if they had complete information.
(This abstract was borrowed from another version of this item.)
|Date of creation:||1991|
|Contact details of provider:|| Postal: C.V. Starr Center, Department of Economics, New York University, 19 W. 4th Street, 6th Floor, New York, NY 10012|
Phone: (212) 998-8936
Fax: (212) 995-3932
Web page: http://econ.as.nyu.edu/object/econ.cvstarr.html
More information through EDIRC
|Order Information:|| Postal: C.V. Starr Center, Department of Economics, New York University, 19 W. 4th Street, 6th Floor, New York, NY 10012|
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.:
- Roth, Alvin E. & Vesna Prasnikar & Masahiro Okuno-Fujiwara & Shmuel Zamir, 1991.
"Bargaining and Market Behavior in Jerusalem, Ljubljana, Pittsburgh, and Tokyo: An Experimental Study,"
American Economic Review,
American Economic Association, vol. 81(5), pages 1068-1095, December.
- Alvin E. Roth & V. Prasnikar & M. Okuno-Fujiwara & S. Zamir, 1998. "Bargaining and market behavior in Jerusalem, Liubljana, Pittsburgh and Tokyo: an experimental study," Levine's Working Paper Archive 344, David K. Levine.
- Kalai, Ehud & Lehrer, Ehud, 1993.
"Subjective Equilibrium in Repeated Games,"
Econometric Society, vol. 61(5), pages 1231-1240, September.
- D. Canning, 2010.
"Average Behavior in Learning Models,"
Levine's Working Paper Archive
490, David K. Levine.
- Woodford, Michael, 1986.
"Learning to Believe in Sunspots,"
86-16, C.V. Starr Center for Applied Economics, New York University.
- Aumann, Robert J. & Heifetz, Aviad, 2002.
Handbook of Game Theory with Economic Applications,
in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 3, chapter 43, pages 1665-1686
- Rothschild, Michael, 1974. "A two-armed bandit theory of market pricing," Journal of Economic Theory, Elsevier, vol. 9(2), pages 185-202, October.
- Drew Fudenberg & David K. Levine, 1993.
"Steady State Learning and Nash Equilibrium,"
Levine's Working Paper Archive
373, David K. Levine.
- Fudenberg, D. & Levine, D.K., 1991.
"Self-Confirming Equilibrium ,"
581, Massachusetts Institute of Technology (MIT), Department of Economics.
- Ehud Kalai & Ehud Lehrer, 1992.
"Weak and Strong Merging of Opinions,"
983, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Mertens, J.-F., 1986.
CORE Discussion Papers
1986024, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Mertens,Jean-FranÃ§ois & Sorin,Sylvain & Zamir,Shmuel, 2015. "Repeated Games," Cambridge Books, Cambridge University Press, number 9781107030206, December.
- Mertens,Jean-FranÃ§ois & Sorin,Sylvain & Zamir,Shmuel, 2015. "Repeated Games," Cambridge Books, Cambridge University Press, number 9781107662636, December.
- Lawrence Blume & David Easley, 1993. "Rational Expectations and Rational Learning," Game Theory and Information 9307003, EconWPA.
- Monderer Dov & Samet Dov, 1995. "Stochastic Common Learning," Games and Economic Behavior, Elsevier, vol. 9(2), pages 161-171, May.
- Nyarko, Yaw, 1990.
"Learning In Mis-Specified Models And The Possibility Of Cycles,"
90-03, C.V. Starr Center for Applied Economics, New York University.
- Nyarko, Yaw, 1991. "Learning in mis-specified models and the possibility of cycles," Journal of Economic Theory, Elsevier, vol. 55(2), pages 416-427, December.
- Grandmont Jean-michel & Laroque G, 1990. "Economic dynamics with learning : some instability examples," CEPREMAP Working Papers (Couverture Orange) 9007, CEPREMAP.
- Jordan, J. S., 1991. "Bayesian learning in normal form games," Games and Economic Behavior, Elsevier, vol. 3(1), pages 60-81, February.
- Milgrom, Paul & Roberts, John, 1991. "Adaptive and sophisticated learning in normal form games," Games and Economic Behavior, Elsevier, vol. 3(1), pages 82-100, February.
- V. Prasnikar & A. Roth, 1998.
"Considerations of fairness and strategy: experimental data from sequential games,"
Levine's Working Paper Archive
451, David K. Levine.
- Vesna Prasnikar & Alvin E. Roth, 1992. "Considerations of Fairness and Strategy: Experimental Data from Sequential Games," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 865-888.
- repec:cor:louvrp:-636 is not listed on IDEAS
- David Canning, 1989. "Convergence to Equilibrium in a Sequence for Games with Learning," STICERD - Theoretical Economics Paper Series 190, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Jordan, J. S., 1985. "Learning rational expectations: The finite state case," Journal of Economic Theory, Elsevier, vol. 36(2), pages 257-276, August.
- Pearce, David G, 1984. "Rationalizable Strategic Behavior and the Problem of Perfection," Econometrica, Econometric Society, vol. 52(4), pages 1029-1050, July.
- Blume, L. E. & Bray, M. M. & Easley, D., 1982. "Introduction to the stability of rational expectations equilibrium," Journal of Economic Theory, Elsevier, vol. 26(2), pages 313-317, April.
- Jordan, J. S., 1992. "The exponential convergence of Bayesian learning in normal form games," Games and Economic Behavior, Elsevier, vol. 4(2), pages 202-217, April.
When requesting a correction, please mention this item's handle: RePEc:cvs:starer:91-18. 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: (Anne Stubing)
If references are entirely missing, you can add them using this form.