Analogy-Based Expectation Equilibrium and Related Concepts:Theory, Applications, and Beyond

Pre-print, Working paper: A unified definition of analogy-based expectation equilibrium (ABEE) for strategic environments involving multiple stages and private information is presented. Various alternative interpretations of the concept are proposed as well as a discussion of how to use ABEE in practice. A variety of applications including two new ones related to speculative trading and personnel economics is reviewed. A discussion of a number of alternative equilibrium concepts follows emphasizing the links and differences with ABEE. Finally, a discussion of possible next steps in particular related to the endogeneization of analogy partitions is proposed.

Author(s)

Philippe Jehiel

Date of publication
  • 2022
Keywords
  • Analogy-Based Expectation
  • Bounded rationality
  • Limited learning
Internal reference
  • PSE Working Papers n°2022-21
Pages
  • 107 p.
Version
  • 1