Contagion through Learning

Jakub Steiner () and Colin Stewart ()

ESE Discussion Papers from Edinburgh School of Economics, University of Edinburgh

Abstract: We study learning in a large class of complete information normal form games. Players continually face new strategic situations and must form beliefs by extrapolation from similar past situations. We characterize the long-run outcomes of learning in terms of iterated dominance in a related incomplete information game with subjective priors. The use of extrapolations in learning may generate contagion of actions across games even if players learn only from games with payoffs very close to the current ones. Contagion may lead to unique long-run outcomes where multiplicity would occur if players learned through repeatedly playing the same game. The process of contagion through learning is formally related to contagion in global games, although the outcomes generally differ.

Keywords: Similarity; learning; contagion; case-based reasoning; global games; coordination; subjective priors. (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe and nep-gth
Date: 2006-12-01, Revised 2007-08-10
View list of references View citations in EconPapers

Downloads: (external link)
http://www.econ.ed.ac.uk/papers/learning070809.pdf (application/pdf)

Related works:
Journal Article: Contagion through learning (2008)
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: http://EconPapers.repec.org/RePEc:edn:esedps:151

Access Statistics for this paper

More papers in ESE Discussion Papers from Edinburgh School of Economics, University of Edinburgh
Address: 50 George Square, EH8 9JY, Edinburgh
Contact information at EDIRC.
Series data maintained by Santiago Sanchez-Pages ().