Correlated equilibrium and behavioral conformity

Edward Cartwright and Myrna Wooders

No 269625, Economic Research Papers from University of Warwick - Department of Economics

Abstract: Is conformity amongst similar individuals consistent with self-interested behavior? We consider a model of incomplete information in which each player receives a signal, interpreted as an allocation to a role, and can make his action choice conditional on his role. Our main result demonstrates that ‘near to’ any correlated equilibrium is an approximate correlated equilibrium ‘with conformity’ — that is, an equilibrium where all ‘similar players’ play the same strategy, have the same probability of being allocated to each role, and receive approximately the same payoff; in short, similar players ‘behave in an identical way’ and are treated nearly equally. To measure ‘similarity’ amongst players we introduce the notions of approximate substitutes and a (δ, Q)-class games — a game with Q classes of players where all players in the same class are δ-substitutes for each other.

Keywords: Institutional and Behavioral Economics; Research Methods/ Statistical Methods (search for similar items in EconPapers)
Pages: 18
Date: 2004-11-11
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Related works:
Working Paper: Correlated Equilibrium and Behavioral Conformity (2005)
Working Paper: Correlated equilibrium and behavioural conformity (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwarer:269625

DOI: 10.22004/ag.econ.269625

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