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Correlated Equilibrium and Behavioral Conformity

  • Edward Cartwright

    ()

    (Department of Economics, Keynes College, University of Kent)

  • Myrna Wooders

    ()

    (Department of Economics, Vanderbilt University)

Is conformity amongst similar individuals consistent with self-interested behavior? We consider a model of incomplete information in which each player receives a signal, interpreted as an allocation to a role, and can make his action choice conditional on his role. Our main result demonstrates that 'near to' any correlated equilibrium is an approximate correlated equilibrium 'with conformity' -- that is, an equilibrium where all 'similar players' play the same strategy, have the same probability of being allocated to each role, and receive approximately the same payoff; in short, similar players 'behave in an identical way' and are treated nearly equally. To measure 'similarity' amongst players we introduce the notions of approximate substitutes and a (delta,Q)-class games -- a game with Q classes of players where all players in the same class are delta-substitutes for each other.

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File URL: http://www.accessecon.com/pubs/VUECON/vu05-w26.pdf
File Function: First version, 2005
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Paper provided by Vanderbilt University Department of Economics in its series Vanderbilt University Department of Economics Working Papers with number 0526.

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Date of creation: Nov 2005
Date of revision:
Handle: RePEc:van:wpaper:0526
Contact details of provider: Web page: http://www.vanderbilt.edu/econ/wparchive/index.html

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  1. Robert J. Aumann, 2010. "Correlated Equilibrium as an expression of Bayesian Rationality," Levine's Working Paper Archive 661465000000000377, David K. Levine.
  2. Adam Brandenburger & Eddie Dekel, 2014. "Rationalizability and Correlated Equilibria," World Scientific Book Chapters, in: The Language of Game Theory Putting Epistemics into the Mathematics of Games, chapter 3, pages 43-57 World Scientific Publishing Co. Pte. Ltd..
  3. Sergiu Hart, 2005. "Adaptive Heuristics," Econometrica, Econometric Society, vol. 73(5), pages 1401-1430, 09.
  4. Friedman, Daniel, 1996. "Equilibrium in Evolutionary Games: Some Experimental Results," Economic Journal, Royal Economic Society, vol. 106(434), pages 1-25, January.
  5. Wooders, Myrna & Edward Cartwright & Selten, Reinhard, 2002. "Social Conformity And Equilibrium In Pure Strategies In Games With Many Players," The Warwick Economics Research Paper Series (TWERPS) 636, University of Warwick, Department of Economics.
  6. AUMANN, Robert J., . "Subjectivity and correlation in randomized strategies," CORE Discussion Papers RP 167, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. Edward Cartwright, 2002. "Learning to play approximate Nash equilibria in games with many players," Levine's Working Paper Archive 506439000000000070, David K. Levine.
  8. Sugden, Robert, 1995. "A Theory of Focal Points," Economic Journal, Royal Economic Society, vol. 105(430), pages 533-50, May.
  9. Rapoport, Amnon & Seale, Darryl A. & Winter, Eyal, 2002. "Coordination and Learning Behavior in Large Groups with Asymmetric Players," Games and Economic Behavior, Elsevier, vol. 39(1), pages 111-136, April.
  10. Kovalenkov, Alexander & Wooders, Myrna, 2003. "Approximate cores of games and economies with clubs," Journal of Economic Theory, Elsevier, vol. 110(1), pages 87-120, May.
  11. Van Huyck, John B & Battalio, Raymond C & Rankin, Frederick W, 1997. "On the Origin of Convention: Evidence from Coordination Games," Economic Journal, Royal Economic Society, vol. 107(442), pages 576-96, May.
  12. Shaun Hargreaves-Heap & Yanis Varoufakis, 2002. "Some Experimental Evidence On The Evolution Of Discrimination, Co--Operation And Perceptions Of Fairness," Economic Journal, Royal Economic Society, vol. 112(481), pages 679-703, July.
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