Almost-Rational Learning of Nash Equilibrium without Absolute Continuity

Thomas Norman

No 602, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: If players learn to play an infinitely repeated game using Bayesian learning, it is known that their strategies eventually approximate Nash equilibria of the repeated game under an absolute-continuity assumption on their prior beliefs. We suppose here that Bayesian learners do not start with such a "grain of truth", but with arbitrarily low probability they revise beliefs that are performing badly. We show that this process converges in probability to a Nash equilibrium of the repeated game.

Keywords: Repeated games; Nash equilibrium; Rational learning; Bayesian learning; Absolute continuity (search for similar items in EconPapers)
JEL-codes: C73 D83 (search for similar items in EconPapers)
Date: 2012-04-01
New Economics Papers: this item is included in nep-evo, nep-gth, nep-hpe and nep-mic
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Citations: View citations in EconPapers (1)

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