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 language | English (US) |
|---|---|
| Pages (from-to) | 59-81 |
| Number of pages | 23 |
| Journal | Journal of Economic Theory |
| Volume | 178 |
| DOIs | |
| State | Published - Nov 2018 |
Keywords
- Anonymous games
- Bayesian equilibrium
- Large games
- Markov equilibrium
- Nash equilibrium
- Repeated games
ASJC Scopus subject areas
- Economics and Econometrics