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Social Conformity And Bounded Rationality In Arbitrary Games With Incomplete Information : Some First Results

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  • Cartwright, Edward

    (Department of Economics, University of Warwick)

  • Wooders, Myrna

    (Department of Economics, University of Warwick)

Abstract

It has been frequently observed, in both economics and psychology, that individuals tend to conform to the choices of other individuals with whom they identify. Can such conformity be consistent with self interested behaviour? To address this question we use the framework of games with incomplete information. For a given game we first put a lower bound on * so that there exists a Nash *-equilibrium in pure strategies consistent with conformity. We also introduce a new concept of conformity that allows players to conform and yet perform different actions. This is achieved by the endogeneous assignment of roles to players and by allowing actions to be conditional on roles. We conclude by relating our research to some experimental literature.

Suggested Citation

  • Cartwright, Edward & Wooders, Myrna, 2003. "Social Conformity And Bounded Rationality In Arbitrary Games With Incomplete Information : Some First Results," The Warwick Economics Research Paper Series (TWERPS) 672, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:672
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    References listed on IDEAS

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    1. Conley, John P. & Wooders, Myrna H., 2001. "Tiebout Economies with Differential Genetic Types and Endogenously Chosen Crowding Characteristics," Journal of Economic Theory, Elsevier, vol. 98(2), pages 261-294, June.
    2. Van Huyck, John B & Battalio, Raymond C & Beil, Richard O, 1990. "Tacit Coordination Games, Strategic Uncertainty, and Coordination Failure," American Economic Review, American Economic Association, vol. 80(1), pages 234-248, March.
    3. Shleifer, Andrei, 2000. "Inefficient Markets: An Introduction to Behavioral Finance," OUP Catalogue, Oxford University Press, number 9780198292272.
    4. Wooders, Myrna & Cartwright, Edward & Selten, Reinhard, 2002. "Social Conformity and Equilibrium in Pure Strategies in Games with Many Players," Economic Research Papers 269410, University of Warwick - Department of Economics.
    5. Rui Pascoa, Mario, 1993. "Approximate equilibrium in pure strategies for non-atomic games," Journal of Mathematical Economics, Elsevier, vol. 22(3), pages 223-241.
    6. Kovalenkov, Alexander & Wooders, Myrna, 2003. "Approximate cores of games and economies with clubs," Journal of Economic Theory, Elsevier, vol. 110(1), pages 87-120, May.
    7. Shaun Hargreaves-Heap & Yanis Varoufakis, 2002. "Some Experimental Evidence On The Evolution Of Discrimination, Co--Operation And Perceptions Of Fairness," Economic Journal, Royal Economic Society, vol. 112(481), pages 679-703, July.
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    Cited by:

    1. Wooders, Myrna & Cartwright, Edward & Selten, Reinhard, 2006. "Behavioral conformity in games with many players," Games and Economic Behavior, Elsevier, vol. 57(2), pages 347-360, November.

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    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General

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