Paying Attention to Payoffs in Analogy-Based Learning
This paper introduces the payoff-confirming analogy-based expectation equilibrium (PCABEE) as a way to refine the set of analogy-based equilibria and the associated admissible analogy partitions. In addition to the actions of others, own payoff history provides information about others’ strategies but, yet, non-Bayesian Nash equilibria may exist both with an incorrect and a correct prior. We provide general conditions when this happens. Two stylized employer-employee interactions, one with a correct and one with an incorrect prior, are provided illustrating how PCABEE can be used to analyze robust stereotypes and how incorrect such stereotypes may lead to discrimination.
|Date of creation:||28 Dec 2009|
|Date of revision:|
|Contact details of provider:|| Postal: Stockholm Institute of Transition Economics, Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden|
Phone: (+46 8) 736 9670
Fax: (+46 8) 31 64 22
Web page: http://www.hhs.se/site/
More information through EDIRC
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.:
- David Cooper & John Kagel, 2008. "Learning and transfer in signaling games," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 34(3), pages 415-439, March.
- Drew Fudenberg & David K. Levine, 2009.
"Learning and Equilibrium,"
Annual Review of Economics,
Annual Reviews, vol. 1(1), pages 385-420, 05.
- Ido Erev & Alvin Roth & Robert Slonim & Greg Barron, 2007. "Learning and equilibrium as useful approximations: Accuracy of prediction on randomly selected constant sum games," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 33(1), pages 29-51, October.
- Ed Hopkins, 2001.
"Two Competing Models of How People Learn in Games,"
Levine's Working Paper Archive
625018000000000226, David K. Levine.
- Drew Fudenberg & David K. Levine, 1998.
"The Theory of Learning in Games,"
MIT Press Books,
The MIT Press,
edition 1, volume 1, number 0262061945.
- Philippe Jehiel, 2005.
"Analogy-based Expectation Equilibrium,"
- Mohlin, Erik, 2014.
Journal of Economic Theory,
Elsevier, vol. 152(C), pages 356-381.
- Mohlin, Erik, 2009. "Optimal Categorization," SSE/EFI Working Paper Series in Economics and Finance 721, Stockholm School of Economics, revised 08 Jul 2009.
- Fudenberg, D. & Levine, D.K., 1991.
"Self-Confirming Equilibrium ,"
581, Massachusetts Institute of Technology (MIT), Department of Economics.
- Erik Eyster & Matthew Rabin, 2005.
Econometric Society, vol. 73(5), pages 1623-1672, 09.
- Eyster, Erik & Rabin, Matthew, 2002. "Cursed Equilibrium," Department of Economics, Working Paper Series qt7p2911dn, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Eyster, Erik & Rabin, Matt, 2002. "Cursed Equilibrium," Department of Economics, Working Paper Series qt6xf4782t, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Erik Eyster & Matt Rabin, 2003. "Cursed Equilibrium," Method and Hist of Econ Thought 0303002, EconWPA.
- Miettinen, Topi, 2009. "The partially cursed and the analogy-based expectation equilibrium," Economics Letters, Elsevier, vol. 105(2), pages 162-164, November.
- Eddie Dekel & Drew Fudenberg & David K Levine, 2002.
"Learning to Play Bayesian Games,"
Levine's Working Paper Archive
625018000000000151, David K. Levine.
- Dekel, Eddie & Fudenberg, Drew & Levine, David, 2004. "Learning to Play Bayesian Games," Scholarly Articles 3200612, Harvard University Department of Economics.
- Eddie Dekel & Drew Fudenberg & David K. Levine, 2000. "Learning to Play Bayesian Games," Discussion Papers 1322, Northwestern University, Center for Mathematical Studies in Economics and Management Science, revised Jul 2001.
- Eddie Dekel & Drew Fudenberg & David K. Levine, 2001. "Learning to Play Bayesian Games," Harvard Institute of Economic Research Working Papers 1926, Harvard - Institute of Economic Research.
- Fryer Roland & Jackson Matthew O., 2008. "A Categorical Model of Cognition and Biased Decision Making," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 8(1), pages 1-44, February.
- Erev, Ido & Roth, Alvin E, 1998. "Predicting How People Play Games: Reinforcement Learning in Experimental Games with Unique, Mixed Strategy Equilibria," American Economic Review, American Economic Association, vol. 88(4), pages 848-81, September.
- Sendhil Mullainathan, 2002. "A Memory-Based Model of Bounded Rationality," The Quarterly Journal of Economics, Oxford University Press, vol. 117(3), pages 735-774.
- Ignacio Esponda, 2008. "Behavioral Equilibrium in Economies with Adverse Selection," American Economic Review, American Economic Association, vol. 98(4), pages 1269-91, September.
- John Huyck & Raymond Battalio & Frederick Rankin, 2007. "Selection dynamics and adaptive behavior without much information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 33(1), pages 53-65, October.
- George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
- Kenneth J. Arrow, 1998. "What Has Economics to Say about Racial Discrimination?," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 91-100, Spring.
When requesting a correction, please mention this item's handle: RePEc:hhs:hasite:0007. 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: (Evelina Bonnier)
If references are entirely missing, you can add them using this form.