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Learning and Selfconfirming Equilibria in Network Games

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  • Pierpaolo Battigalli
  • Fabrizio Panebianco
  • Paolo Pin

Abstract

Consider a set of agents who play a network game repeatedly. Agents may not know the network. They may even be unaware that they are interacting with other agents in a network. Possibly, they just understand that their payoffs depend on an unknown state that is, actually, an aggregate of the actions of their neighbors. Each time, every agent chooses an action that maximizes her instantaneous subjective expected payoff and then updates her beliefs according to what she observes. In particular, we assume that each agent only observes her realized payoff. A steady state of the resulting dynamic is a selfconfirming equilibrium given the assumed feedback. We characterize the structure of the set of selfconfirming equilibria in the given class of network games, we relate selfconfirming and Nash equilibria, and we analyze simple conjectural best-reply paths whose limit points are selfconfirming equilibria.

Suggested Citation

  • Pierpaolo Battigalli & Fabrizio Panebianco & Paolo Pin, 2018. "Learning and Selfconfirming Equilibria in Network Games," Papers 1812.11775, arXiv.org, revised Jul 2022.
    • Handle: RePEc:arx:papers:1812.11775
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    Cited by:

    1. Mira Frick & Ryota Iijima & Yuhta Ishii, 2018. "Dispersed Behavior and Perceptions in Assortative Societies," Cowles Foundation Discussion Papers 2128R2, Cowles Foundation for Research in Economics, Yale University, revised Oct 2021.
    2. Olcina, Gonzalo & Panebianco, Fabrizio & Zenou, Yves, 2024. "Conformism, social pressure, and the dynamics of integration," Journal of Economic Behavior & Organization, Elsevier, vol. 220(C), pages 279-304.
    3. Bochet, Olivier & Faure, Mathieu & Long, Yan & Zenou, Yves, 2020. "Perceived Competition in Networks," CEPR Discussion Papers 15582, C.E.P.R. Discussion Papers.

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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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