BERK-NASH EQUILIBRIUM: A FRAMEWORK FOR MODELING AGENTS WITH MISSPECIFIED MODELS.
We develop an equilibrium framework that relaxes the standard assumption that people have a correctly specified view of their environment. Each player is characterized by a (possibly misspecified) subjective model, which describes the set of feasible beliefs over payoff-relevant consequences as a fu...
| Publicado en: | Econometrica Vol. 84; no. 3; pp. 1093 - 1131 |
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| Autores principales: | , |
| Formato: | Artículo |
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Wiley-Blackwell
May2016
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=115515429&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 115515429 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00129682 ECN jtl: Econometrica issn: 00129682 maglogo: Y pubinfo: dt: May2016 vid: 84 iid: 3 pid: 480 pub: Wiley-Blackwell artinfo: ui: 115515429 10.3982/ECTA12609 ppf: 1093 ppct: 38 formats: tig: atl: BERK-NASH EQUILIBRIUM: A FRAMEWORK FOR MODELING AGENTS WITH MISSPECIFIED MODELS. aug: au: ESPONDA, IGNACIO POUZO, DEMIAN affil: Olin Business School, Washington University in St. Louis, 1 Brookings Drive, Campus Box 1133, St. Louis, MO 63130, U.S.A. Dept. of Economics, UC Berkeley, 530-1 Evans Hall #3880, Berkeley, CA 94720, U.S.A. su: Structural frames Modeling agencies Equilibrium Economics literature Statistics sug: subj: Employment placement agencies and executive search services Agents and Managers for Artists, Athletes, Entertainers, and Other Public Figures Framing Contractors Finish Carpentry Contractors Structural frames Modeling agencies Equilibrium Economics literature Statistics keyword: MisspecifiedBayesian learningequilibrium MisspecifiedBayesian learningequilibrium ab: We develop an equilibrium framework that relaxes the standard assumption that people have a correctly specified view of their environment. Each player is characterized by a (possibly misspecified) subjective model, which describes the set of feasible beliefs over payoff-relevant consequences as a function of actions. We introduce the notion of a Berk-Nash equilibrium: Each player follows a strategy that is optimal given her belief, and her belief is restricted to be the best fit among the set of beliefs she considers possible. The notion of best fit is formalized in terms of minimizing the Kullback- Leibler divergence, which is endogenous and depends on the equilibrium strategy profile. Standard solution concepts such as Nash equilibrium and self-confirming equilibrium constitute special cases where players have correctly specified models. We provide a learning foundation for Berk-Nash equilibrium by extending and combining results from the statistics literature on misspecified learning and the economics literature on learning in games. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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