Large strategic dynamic interactions

Ehud Kalai and Eran Shmaya

Journal of Economic Theory, 2018, vol. 178, issue C, 59-81

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.

Keywords: Anonymous games; Nash equilibrium; Repeated games; Large games; Bayesian equilibrium; Markov equilibrium (search for similar items in EconPapers)
JEL-codes: C72 C73 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:178:y:2018:i:c:p:59-81

DOI: 10.1016/j.jet.2018.08.001

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