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Large strategic dynamic interactions

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  • Kalai, Ehud
  • Shmaya, Eran

Abstract

The paper presents a model of large strategic dynamic interactions in an environment with uncertain fundamentals. The interaction is among a large finite group of interdependent players, diversified in their preferences and information. We study an imagined-continuum equilibrium, a behavioral hybrid of games with a continuum of players and finite games. This equilibrium enables simple Bayesian reasoning and admits natural Markov-perfect equilibria. In addition, we establish bounds on the probabilistic discrepancies between players' beliefs that are derived from the continuum model and the actual finite reality.

Suggested Citation

  • Kalai, Ehud & Shmaya, Eran, 2018. "Large strategic dynamic interactions," Journal of Economic Theory, Elsevier, vol. 178(C), pages 59-81.
    • Handle: RePEc:eee:jetheo:v:178:y:2018:i:c:p:59-81
    DOI: 10.1016/j.jet.2018.08.001
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    3. Enxian Chen Bin Wu Hanping Xu, 2024. "The equilibrium properties of obvious strategy profiles in games with many players," Papers 2410.22144, arXiv.org.
    4. Carmona, Guilherme & Podczeck, Konrad, 2020. "Pure strategy Nash equilibria of large finite-player games and their relationship to non-atomic games," Journal of Economic Theory, Elsevier, vol. 187(C).

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    More about this item

    Keywords

    Anonymous games; Nash equilibrium; Repeated games; Large games; Bayesian equilibrium; Markov equilibrium;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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