Large strategic dynamic interactions

Ehud Kalai, Eran Shmaya*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

The paper presents a model of large strategic dynamic interactions in an environment with uncertain fundamentals. The interaction is among a large finite group of interdependent players, diversified in their preferences and information. We study an imagined-continuum equilibrium, a behavioral hybrid of games with a continuum of players and finite games. This equilibrium enables simple Bayesian reasoning and admits natural Markov-perfect equilibria. In addition, we establish bounds on the probabilistic discrepancies between players’ beliefs that are derived from the continuum model and the actual finite reality.

Original languageEnglish (US)
Pages (from-to)59-81
Number of pages23
JournalJournal of Economic Theory
Volume178
DOIs
StatePublished - Nov 2018

Keywords

  • Anonymous games
  • Bayesian equilibrium
  • Large games
  • Markov equilibrium
  • Nash equilibrium
  • Repeated games

ASJC Scopus subject areas

  • Economics and Econometrics

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