Heterogeneous beliefs and local information in stochastic fictitious play

Drew Fudenberg and Satoru Takahashi

Games and Economic Behavior, 2011, vol. 71, issue 1, 100-120

Abstract: Stochastic fictitious play (SFP) assumes that agents do not try to influence the future play of their current opponents, an assumption that is justified by appeal to a setting with a large population of players who are randomly matched to play the game. However, the dynamics of SFP have only been analyzed in models where all agents in a player role have the same beliefs. We analyze the dynamics of SFP in settings where there is a population of agents who observe only outcomes in their own matches and thus have heterogeneous beliefs. We provide conditions that ensure that the system converges to a state with homogeneous beliefs, and that its asymptotic behavior is the same as with a single representative agent in each player role.

Date: 2011
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Related works:
Working Paper: Heterogeneous beliefs and local information in stochastic fictitious play (2011)
Working Paper: Heterogeneous Beliefs and Local Information in Stochastic Fictitious Play (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:71:y:2011:i:1:p:100-120

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