Correlated Equilibrium and Behavioral Conformity

Edward Cartwright and Myrna Wooders

No 526, Vanderbilt University Department of Economics Working Papers from Vanderbilt University 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 (delta,Q)-class games -- a game with Q classes of players where all players in the same class are delta-substitutes for each other.

JEL-codes: C72 C73 D82 (search for similar items in EconPapers)
Date: 2005-11
New Economics Papers: this item is included in nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://www.accessecon.com/pubs/VUECON/vu05-w26.pdf First version, 2005 (application/pdf)

Related works:
Working Paper: Correlated equilibrium and behavioural conformity (2005)
Working Paper: Correlated equilibrium and behavioral conformity (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:van:wpaper:0526

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