A Necessary and Sufficient Condition for Convergence of Statistical to Strategic Equilibria of Market Games

Dimitrios Tsomocos, Dimitrios Voliotis (), University of Athens and Council of Economic Advisers and Hellenic Ministry of Economy and Finance

No 2005-FE-14, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: In our model, we treat a market game where traders are heterogeneous not only with respect to their rationality level but also with the formation of their subjective beliefs for the strategy of their opponents. Under these conditions, the market mechanism results a statistical equilibrium, where traders randomise among their available actions due to their limited rationality. Here, we provide a necessary and sufficient condition for convergence of statistical to strategic equilibria of market games, when traders become more informed and increasingly rational.

Keywords: Market games; Bounded rationality; Rational learning (search for similar items in EconPapers)
Date: 2005-11-01
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Related works:
Journal Article: A NECESSARY AND SUFFICIENT CONDITION FOR CONVERGENCE OF STATISTICAL TO STRATEGIC EQUILIBRIA OF MARKET GAMES (2009)
Working Paper: A Necessary and Sufficient Condition for Convergence of Statistical to Strategic Equilibria of Market Games (2005)
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