1,634 research outputs found
Comparison of information structures
We introduce two ways of comparing information structures, say and . First we say that is richer than when for every compact game , all correlated equilibrium distributions of induced by are also induced by . Second, we say that is faithfully reproducable from when all the players can compute from their information in ``new information'' that they could have received from . We prove that is richer than if and only if is faithfully reproducable from .Game--theory, information, correlation
A reasoning approach to introspection and unawareness
We introduce and study a unified reasoning process which allows to represent the beliefs of both a fully rational agent and of an unaware one. This reasoning process provides natural properties to introspection and unawareness. The corresponding model for the rational or boundedly rational agents is both easy to describe and to work with, and the agentâs full system of beliefs has natural descriptions using a reduced number of parameters.Economics (Jel: A)
When is the individually rational payoff in a repeated game equal to the minmax payoff?
We study the relationship between a playerâs (stage game) minmax payoff and the individually rational payoff in repeated games with imperfect monitoring. We characterize the signal structures under which these two payoffs coincide for any payoff matrix. Under a full rank assumption, we further show that, if the monitoring structure of an infinitely repeated game ânearlyâ satisfies this condition, then these two payoffs are approximately equal, independently of the discount factor. This provides conditions under which existing folk theorems exactly characterize the limiting payoff set.
Informational cascades elicit private information
We introduce cheap talk in a dynamic investment model with information externalities. We first show how social learning adversely affects the credibility of cheap talk messages. Next, we show how an informational cascade makes truthtelling incentive compatible. A separating equilibrium only exists for high surplus projects. Both an investment subsidy and an investment tax can increase welfare. The more precise the senderâs information, the higher her incentives to truthfully reveal her private information.Cheap Talk; Information Externality; Informational Cascades; Social Learning; Herd Behaviour
Finite Sample Exact tests for Linear
We introduce tests for finite sample multivariate linear regressions with heteroskedastic errors that have mean zero. We assume bounds on endoge- nous variables but do not make additional assumptions on errors. The tests are exact, i.e., they have guaranteed type I error probabilities. We provide bounds on probability of type II errors, and apply the tests to empirical data.
Entropy Bounds on Bayesian Learning.
An observer of a process View the MathML source believes the process is governed by Q whereas the true law is P. We bound the expected average distance between P(xt|x1,âŠ,xtâ1) and Q(xt|x1,âŠ,xtâ1) for t=1,âŠ,n by a function of the relative entropy between the marginals of P and Q on the n first realizations. We apply this bound to the cost of learning in sequential decision problems and to the merging of Q to P.Bayesian learning; Repeated decision problem; Value of information; Entropy;
Informational Cascades Elicit Private Information
We introduce cheap talk in a dynamic investment model with information externalities. We first show how social learning adversely affects the credibility of cheap talk messages. Next, we show how an informational cascade makes thruthtelling incentive compatible. A separating equilibrium only exists for high surplus projects. Both an investment subsidy and an investment tax can increase welfare. The more precise the sender's information, the higher her incentives to truthfully reveal her private information.Cheap Talk, Information Externality, Informational Cascades, Social Learning, Herd Behaviour
Repeated Communication Through the Mechanism And.
We consider the âandâ communication device that receives inputs from two players and outputs the public signal yes if both messages are yes, and outputs no otherwise. We prove that no correlation can securely be implemented using this device, even when infinitely many stages of communication are allowed."And" communication device;
COORDINATION THROUGH DE BRUIJN SEQUENCES
Let ” be a rational distribution over a finite alphabet, and ( ) be a n-periodic sequences which first n elements are drawn i.i.d. according to ”. We consider automata of bounded size that input and output at stage t. We prove the existence of a constant C such that, whenever , with probability close to 1 there exists an automaton of size m such that the empirical frequency of stages such that is close to 1. In particular, one can take , where and .Coordination, complexity, De Bruijn sequences, automata
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