Adverse Selection, Heterogeneous Beliefs, and Evolutionary Learning

Clemens Buchen () and Alberto Palermo ()
Additional contact information
Clemens Buchen: WHU-Otto Beisheim School of Management
Alberto Palermo: Trier University

Dynamic Games and Applications, 2022, vol. 12, issue 2, No 2, 343-362

Abstract: Abstract We relax the common assumption of homogeneous beliefs in principal-agent relationships with adverse selection. Principals are competitors in the product market and write contracts also on the base of an expected aggregate. The model is a version of a cobweb model. In an evolutionary learning set-up, which is imitative, principals can have different beliefs about the distribution of agents’ types in the population. The resulting nonlinear dynamic system is studied. Convergence to a uniform belief depends on the relative size of the bias in beliefs.

Keywords: Evolutionary game theory; Imitation equilibrium; Heterogeneous beliefs; Adverse selection; Cobweb model (search for similar items in EconPapers)
JEL-codes: C61 C73 D82 D83 E32 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s13235-021-00396-x Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
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:spr:dyngam:v:12:y:2022:i:2:d:10.1007_s13235-021-00396-x

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/13235

DOI: 10.1007/s13235-021-00396-x

Access Statistics for this article

Dynamic Games and Applications is currently edited by Georges Zaccour

More articles in Dynamic Games and Applications from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().