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Behavioral Properties of Correlated Equilibrium; Social Group Structures with Conformity and Stereotyping


  • Edward Cartwright

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

  • Myrna Wooders

    () (Department of Economics, Vanderbilt University)


We explore the potential for correlated equilibrium to capture conformity to norms and the coordination of behavior within social groups. Given a partition of players into social groups we propose properties that one may expect of a correlated equilibrium: within-group anonymity, group independence, predictable group behavior and stereotyped beliefs. We then demonstrate that (a) a correlated equilibrium satisfying these properties exists in games with many players (b) a player who stereotypes other players cannot do better with correct beliefs and (c) correlation allows predictability of group behavior, which ensures that a correlated equilibrium is approximately ex-post stable.

Suggested Citation

  • Edward Cartwright & Myrna Wooders, 2008. "Behavioral Properties of Correlated Equilibrium; Social Group Structures with Conformity and Stereotyping," Vanderbilt University Department of Economics Working Papers 0814, Vanderbilt University Department of Economics.
  • Handle: RePEc:van:wpaper:0814

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    References listed on IDEAS

    1. Edward Cartwright & Myrna Wooders, 2009. "On equilibrium in pure strategies in games with many players," International Journal of Game Theory, Springer;Game Theory Society, vol. 38(1), pages 137-153, March.
    2. Conley, John P. & Wooders, Myrna H., 2001. "Tiebout Economies with Differential Genetic Types and Endogenously Chosen Crowding Characteristics," Journal of Economic Theory, Elsevier, vol. 98(2), pages 261-294, June.
    3. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 817-868.
    4. Sergiu Hart, 2013. "Adaptive Heuristics," World Scientific Book Chapters,in: Simple Adaptive Strategies From Regret-Matching to Uncoupled Dynamics, chapter 11, pages 253-287 World Scientific Publishing Co. Pte. Ltd..
    5. Cartwright, Edward & Wooders, Myrna, 2005. "Correlated equilibrium and behavioural conformity," The Warwick Economics Research Paper Series (TWERPS) 732, University of Warwick, Department of Economics.
    6. Gravel, Nicolas & Thoron, Sylvie, 2007. "Does endogenous formation of jurisdictions lead to wealth-stratification?," Journal of Economic Theory, Elsevier, vol. 132(1), pages 569-583, January.
    7. Wooders, Myrna & Cartwright, Edward & Selten, Reinhard, 2006. "Behavioral conformity in games with many players," Games and Economic Behavior, Elsevier, vol. 57(2), pages 347-360, November.
    8. Myerson, R B, 1986. "Acceptable and Predominant Correlated Equilibria," International Journal of Game Theory, Springer;Game Theory Society, vol. 15(3), pages 133-154.
    9. Bernheim, B Douglas, 1994. "A Theory of Conformity," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 841-877, October.
    10. Edward Cartwright & Myrna Wooders, 2003. "Conformity and Bounded Rationality in Games with Many Players," Working Papers 2003.123, Fondazione Eni Enrico Mattei.
    11. Gabrielle Demange, 2004. "Group formation: The interaction of increasing returns and preferences' diversity," DELTA Working Papers 2004-30, DELTA (Ecole normale supérieure).
    12. Forges, Francoise M, 1986. "An Approach to Communication Equilibria," Econometrica, Econometric Society, vol. 54(6), pages 1375-1385, November.
    13. George A. Akerlof, 1980. "A Theory of Social Custom, of which Unemployment may be One Consequence," The Quarterly Journal of Economics, Oxford University Press, vol. 94(4), pages 749-775.
    14. ., 1998. "Game Theory," Chapters,in: The Handbook of Economic Methodology, chapter 42 Edward Elgar Publishing.
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    More about this item


    Non-cooperative games; correlated equilibrium; large games; behavioral conformity; stereotyping; identity; expost stability; group anonymity; group independence; predictable group behavior;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations


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