Overcoming Free-Riding in Bandit Games

Johannes Hörner, Nicolas Klein and Sven Rady
Additional contact information
Johannes Hörner: Yale University [New Haven], TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CNRS - Centre National de la Recherche Scientifique

Working Papers from HAL

Abstract: This paper considers a class of experimentation games with L´evy bandits encompassing those of Bolton and Harris (1999) and Keller, Rady and Cripps (2005). Its main result is that efficient (perfect Bayesian) equilibria exist whenever players' payoffs have a diffusion component. Hence, the trade-offs emphasized in the literature do not rely on the intrinsic nature of bandit models but on the commonly adopted solution concept (MPE). This is not an artifact of continuous time: we prove that such equilibria arise as limits of equilibria in the discretetime game. Furthermore, it suffices to relax the solution concept to strongly symmetric equilibrium.

Keywords: Two-Armed Bandit; Bayesian Learning; Strategic Experimentation; Strongly Symmetric Equilibrium. (search for similar items in EconPapers)
Date: 2021-04-01
New Economics Papers: this item is included in nep-gth and nep-mic
Note: View the original document on HAL open archive server: https://hal.science/hal-03187515v1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://hal.science/hal-03187515v1/document (application/pdf)

Related works:
Journal Article: Overcoming Free-Riding in Bandit Games (2022)
Working Paper: Overcoming Free-Riding in Bandit Games (2022)
Working Paper: Overcoming Free-Riding in Bandit Games (2021)
Working Paper: Overcoming Free-Riding in Bandit Games (2020)
Working Paper: Overcoming Free-Riding in Bandit Games (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-03187515

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().