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Analysis of Information Feedback and Selfconfirming Equilibrium

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  • Pierpaolo Battigalli
  • Simone Cerreia-Vioglio
  • Fabio Maccheroni
  • Massimo Marinacci

Abstract

Recent research emphasizes the importance of information feedback in situations of recurrent decisions and strategic interaction, showing how it affects the uncertainty that underlies selfcon?rming equilibrium (e.g., Battigalli et al. [9, 2015], Fudenberg and Kamada [13, 2015]). Here, we discuss in detail several properties of this key feature of recurrent interaction and derive relationships. This allows us to elucidate our notion of Maxmin selfconfi?rming equilibrium, hereby agents are extremely ambiguity averse, and to compare it with the partially-speci?ed-probabilities (PSP) equilibrium of Lehrer [19, 2012]. Symmetric Maxmin selfcon?firming equilibrium in mixed strategies exists under either ?observable payoffs,?or ?separable feedback.?The latter assumption makes this equilibrium concept essentially equivalent to PSP-equilibrium. If observability of payoffs holds as well, then these equilibrium concepts collapse to mixed Nash equilibrium. Keywords: Selfconfi?rming equilibrium, conjectural equilibrium, information feedback, ambiguity aversion, partially speci?ed probabilities. JEL classification: C72, D80.

Suggested Citation

  • Pierpaolo Battigalli & Simone Cerreia-Vioglio & Fabio Maccheroni & Massimo Marinacci, 2012. "Analysis of Information Feedback and Selfconfirming Equilibrium," Working Papers 459, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  • Handle: RePEc:igi:igierp:459
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    References listed on IDEAS

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    1. Fudenberg, Drew & Levine, David K, 1993. "Steady State Learning and Nash Equilibrium," Econometrica, Econometric Society, vol. 61(3), pages 547-573, May.
    2. Pierpaolo Battigalli & Simone Cerreia-Vioglio & Fabio Maccheroni & Massimo Marinacci, 2015. "Self-Confirming Equilibrium and Model Uncertainty," American Economic Review, American Economic Association, vol. 105(2), pages 646-677, February.
    3. Ehud Lehrer, 2012. "Partially Specified Probabilities: Decisions and Games," American Economic Journal: Microeconomics, American Economic Association, vol. 4(1), pages 70-100, February.
    4. Yaron Azrieli, 2009. "On pure conjectural equilibrium with non-manipulable information," International Journal of Game Theory, Springer;Game Theory Society, vol. 38(2), pages 209-219, June.
    5. Massimo Marinacci, 2015. "Model Uncertainty," Journal of the European Economic Association, European Economic Association, vol. 13(6), pages 1022-1100, December.
    6. Fudenberg, Drew & Kreps, David M., 1995. "Learning in extensive-form games I. Self-confirming equilibria," Games and Economic Behavior, Elsevier, vol. 8(1), pages 20-55.
    7. Fudenberg, Drew & Levine, David K, 1993. "Self-Confirming Equilibrium," Econometrica, Econometric Society, vol. 61(3), pages 523-545, May.
    8. Kalai, Ehud & Lehrer, Ehud, 1995. "Subjective games and equilibria," Games and Economic Behavior, Elsevier, vol. 8(1), pages 123-163.
    9. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, January.
    10. Kamada, Yuichiro & Fudenberg, Drew, 2015. "Rationalizable partition-confirmed equilibrium," Theoretical Economics, Econometric Society, vol. 10(3), September.
    11. Gilboa, Itzhak & Schmeidler, David, 1989. "Maxmin expected utility with non-unique prior," Journal of Mathematical Economics, Elsevier, vol. 18(2), pages 141-153, April.
    12. Mario Gilli, 1999. "Adaptive Learning in Imperfect Monitoring Games," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 2(2), pages 472-485, April.
    13. Lehrer, Ehud & Teper, Roee, 2011. "Justifiable preferences," Journal of Economic Theory, Elsevier, vol. 146(2), pages 762-774, March.
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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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