Learning dynamics with social comparisons and limited memory
Name
2626-22776-1-PB.pdf
Description
Published version
Size
399.78 KB
Format
Adobe PDF
Checksum (MD5)
c367695fe8cdebab487e7ca124422819
Author(s)
Block, Juan I.
Fudenberg, Drew
Levine, David K.
Date Issued
May 2018
Journal
Theoretical Economics
Publisher
The Econometric Society
Citation
Block, Juan I. et al., "Learning dynamics with social comparisons and limited memory." Theoretical Economics 14, 1 (January 2019): 135–172 doi. 10.3982/TE2626 ©2018 Authors
Version
Final published version
Abstract
We study models of learning in games where agents with limited memory use social information to decide when and how to change their play. When agents observe only the aggregate distribution of payoffs and recall only information from the last period, aggregate play comes close to Nash equilibrium for generic games, and pure equilibria are generally more stable than mixed equilibria. When agents observe both the payoff distribution of other agents and the actions that led to those payoffs, and can remember this for some time, the length of their memory plays a key role: With short memories, aggregate play may not come close to Nash equilibrium unless the game satisfies an acyclicity condition. When agents have sufficiently long memory, generically aggregate play comes close to Nash equilibrium. However, unlike in the model where social information is solely about how well other agents are doing, mixed equilibria can be favored over pure ones. ©2019 The Authors
MIT Department
Massachusetts Institute of Technology. Department of Economics
Terms of Use
Creative Commons Attribution NonCommercial License 4.0
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.3982/TE2626
