Expectation Conformity in Strategic Cognition

Alessandro Pavan and Jean Tirole

No 21685, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study situations in which players shape their own understanding of the game, as well as others’, through information acquisition, communication, and other forms of strategic cognition. We introduce the concept of expectation conformity: incentives to change cognition are stronger when others expect such changes and/or make similar changes themselves. Expectation conformity provides a revealed-preference characterization of equilibrium determinacy in cognitive games. When it fails, equilibrium cognition is unique, independently of cognitive costs. When it holds, suitable costs generate multiple equilibria. We illustrate the implications in two-player constant-sum and linear-quadratic-Gaussian games. The online supplement considers other forms of cognition.

JEL-codes: C72 C78 D82 D83 D86 (search for similar items in EconPapers)
Date: 2026-06
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