Adaptation and complexity in repeated games
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Adaptation and complexity in repeated games. / Maenner, Eliot Alexander.
In: Games and Economic Behavior, Vol. 63, No. 1, 2008, p. 166-187.Research output: Contribution to journal › Journal article › Research › peer-review
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TY - JOUR
T1 - Adaptation and complexity in repeated games
AU - Maenner, Eliot Alexander
N1 - JEL classification: C72, D83
PY - 2008
Y1 - 2008
N2 - The paper presents a learning model for two-player infinitely repeated games. In an inference step players construct minimally complex inferences of strategies based on observed play, and in an adaptation step players choose minimally complex best responses to an inference. When players randomly select an inference from a probability distribution with full support the set of steady states is a subset of the set of Nash equilibria in which only stage game Nash equilibria are played. When players make ‘cautious' inferences the set of steady states is the subset of self-confirming equilibria with Nash outcome paths. When players use different inference rules, the set of steady states can lie between the previous two cases
AB - The paper presents a learning model for two-player infinitely repeated games. In an inference step players construct minimally complex inferences of strategies based on observed play, and in an adaptation step players choose minimally complex best responses to an inference. When players randomly select an inference from a probability distribution with full support the set of steady states is a subset of the set of Nash equilibria in which only stage game Nash equilibria are played. When players make ‘cautious' inferences the set of steady states is the subset of self-confirming equilibria with Nash outcome paths. When players use different inference rules, the set of steady states can lie between the previous two cases
KW - Faculty of Social Sciences
KW - learning
KW - bounded rationality
U2 - 10.1016/j.geb.2007.07.008
DO - 10.1016/j.geb.2007.07.008
M3 - Journal article
VL - 63
SP - 166
EP - 187
JO - Games and Economic Behavior
JF - Games and Economic Behavior
SN - 0899-8256
IS - 1
ER -
ID: 1847349