Forthcoming : Endogenous clustering and analogy-based expectation equilibrium
Article dans une revue: Normal-form two-player games are categorized by players into K analogy classes so as to minimize the prediction error about the behavior of the opponent. This results in Clustered Analogy-Based Expectation Equilibria in which strategies are analogy-based expectation equilibria given the analogy partitions and analogy partitions minimize the prediction errors given the strategies. We distinguish between environments with self-repelling analogy partitions in which some mixing over partitions is required and environments with self-attractive partitions in which several analogy partitions can arise, thereby suggesting new channels of belief heterogeneity and equilibrium multiplicity. Various economic applications are discussed.
Auteur(s)
Philippe Jehiel, Giacomo Weber
Revue
- Review of Economic Studies
Date de publication
- 2025
URL de la notice HAL
Version
- 1