Behavioral Properties of Correlated Equilibrium; Social Group Structures with Conformity and Stereotyping

Edward Cartwright and Myrna Wooders

No 814, Vanderbilt University Department of Economics Working Papers from Vanderbilt University Department of Economics

Abstract: We explore the potential for correlated equilibrium to capture conformity to norms and the coordination of behavior within social groups. Given a partition of players into social groups we propose properties that one may expect of a correlated equilibrium: within-group anonymity, group independence, predictable group behavior and stereotyped beliefs. We then demonstrate that (a) a correlated equilibrium satisfying these properties exists in games with many players (b) a player who stereotypes other players cannot do better with correct beliefs and (c) correlation allows predictability of group behavior, which ensures that a correlated equilibrium is approximately ex-post stable.

Keywords: Non-cooperative games; correlated equilibrium; large games; behavioral conformity; stereotyping; identity; expost stability; group anonymity; group independence; predictable group behavior (search for similar items in EconPapers)
JEL-codes: C72 D7 D71 (search for similar items in EconPapers)
Date: 2008-08
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Persistent link: https://EconPapers.repec.org/RePEc:van:wpaper:0814

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