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Bayesian Learning When Players Are Misspecified about Others

Author

Listed:
  • Takeshi Murooka
  • Yuichi Yamamoto

Abstract

This paper considers Bayesian learning when players are biased about the data-generating process, and are biased about the opponent’s bias about the data-generating process. Specifically, we assume that each player’s bias about others takes the form of interpersonal projection, which is a tendency to overestimate the extent to which others share the player’s own view. We show that there is a class of games in which even an arbitrarily small amount of bias can destroy correct learning of an unknown state, i.e., the probability of the posterior beliefs converging to an approximately correct state suddenly drops to zero.

Suggested Citation

  • Takeshi Murooka & Yuichi Yamamoto, 2025. "Bayesian Learning When Players Are Misspecified about Others," ISER Discussion Paper 1284r, Institute of Social and Economic Research, The University of Osaka, revised Aug 2026.
    • Handle: RePEc:dpr:wpaper:1284r
    as

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    References listed on IDEAS

    as
    1. Fudenberg, Drew & Romanyuk, Gleb & Strack, Philipp, 2017. "Active learning with a misspecified prior," Theoretical Economics, Econometric Society, vol. 12(3), September.
    2. Ignacio Esponda & Demian Pouzo, 2016. "Berk–Nash Equilibrium: A Framework for Modeling Agents With Misspecified Models," Econometrica, Econometric Society, vol. 84, pages 1093-1130, May.
    3. Esponda, Ignacio & Pouzo, Demian & Yamamoto, Yuichi, 2021. "Asymptotic behavior of Bayesian learners with misspecified models," Journal of Economic Theory, Elsevier, vol. 195(C).
    4. J. Aislinn Bohren & Daniel N. Hauser, 2021. "Learning With Heterogeneous Misspecified Models: Characterization and Robustness," Econometrica, Econometric Society, vol. 89(6), pages 3025-3077, November.
    5. Bohren, Aislinn & Hauser, Daniel, 2017. "Learning with Heterogeneous Misspecified Models: Characterization and Robustness," CEPR Discussion Papers 12036, Centre for Economic Policy Research.
    Full references (including those not matched with items on IDEAS)

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