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Analysis of Information Feedback and Selfconfirming Equilibrium

Author

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  • Pierpaolo Battigalli
  • Simone Cerreia-Vioglio
  • Fabio Maccheroni
  • Massimo Marinacci
Abstract
Recent research emphasizes the importance of information feedback in situations of recurrent decisions and strategic interaction, showing how it affects the uncertainty that underlies selfcon?rming equilibrium (e.g., Battigalli et al. [9, 2015], Fudenberg and Kamada [13, 2015]). Here, we discuss in detail several properties of this key feature of recurrent interaction and derive relationships. This allows us to elucidate our notion of Maxmin selfconfi?rming equilibrium, hereby agents are extremely ambiguity averse, and to compare it with the partially-speci?ed-probabilities (PSP) equilibrium of Lehrer [19, 2012]. Symmetric Maxmin selfcon?firming equilibrium in mixed strategies exists under either ?observable payoffs,?or ?separable feedback.?The latter assumption makes this equilibrium concept essentially equivalent to PSP-equilibrium. If observability of payoffs holds as well, then these equilibrium concepts collapse to mixed Nash equilibrium. Keywords: Selfconfi?rming equilibrium, conjectural equilibrium, information feedback, ambiguity aversion, partially speci?ed probabilities. JEL classification: C72, D80.

Suggested Citation

  • Pierpaolo Battigalli & Simone Cerreia-Vioglio & Fabio Maccheroni & Massimo Marinacci, 2012. "Analysis of Information Feedback and Selfconfirming Equilibrium," Working Papers 459, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  • Handle: RePEc:igi:igierp:459
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    References listed on IDEAS

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    1. Acemoglu,Daron & Arellano,Manuel & Dekel,Eddie (ed.), 2013. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9781107016064, September.
    2. Pierpaolo Battigalli & Simone Cerreia-Vioglio & Fabio Maccheroni & Massimo Marinacci, 2015. "Self-Confirming Equilibrium and Model Uncertainty," American Economic Review, American Economic Association, vol. 105(2), pages 646-677, February.
    3. Fudenberg, Drew & Levine, David K, 1993. "Self-Confirming Equilibrium," Econometrica, Econometric Society, vol. 61(3), pages 523-545, May.
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    7. Itzhak Gilboa & Massimo Marinacci, 2011. "Ambiguity and the Bayesian Paradigm," Working Papers 379, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    8. Acemoglu,Daron & Arellano,Manuel & Dekel,Eddie (ed.), 2013. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9781107016057, September.
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    Cited by:

    1. Battigalli, P. & Catonini, E. & Lanzani, G. & Marinacci, M., 2019. "Ambiguity attitudes and self-confirming equilibrium in sequential games," Games and Economic Behavior, Elsevier, vol. 115(C), pages 1-29.
    2. Fudenberg, Drew & He, Kevin, 2021. "Player-compatible learning and player-compatible equilibrium," Journal of Economic Theory, Elsevier, vol. 194(C).
    3. Frédéric Koessler & Marieke Pahlke, 2023. "Feedback Design in Strategic-Form Games with Ambiguity Averse Players," Working Papers halshs-04039083, HAL.
    4. Bernhard Kasberger, 2022. "An Equilibrium Model of the First-Price Auction with Strategic Uncertainty: Theory and Empirics," Papers 2202.07517, arXiv.org, revised Mar 2022.

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    More about this item

    Keywords

    selfconfi?rming equilibrium; conjectural equilibrium; information feedback; ambiguity aversion; partially speci?ed probabilities. jel classification: c72; d80.;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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