Endogenous Clustering and Analogy-Based Expectation Equilibrium.
Normal-form two-player games are categorized by players into K analogy classes so as to minimize the prediction error about the behaviour of the opponent. This results in Clustered Analogy-Based Expectation Equilibria in which strategies are analogy-based expectation equilibria given the analogy par...
| Publicado en: | Review of Economic Studies Vol. 93; no. 2; pp. 1077 - 1103 |
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| Autores principales: | , |
| Formato: | Artículo |
| Publicado: |
Oxford University Press / USA
Mar2026
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| Materias: | |
| Acceso en línea: | Ver este registro en EBSCOhost |
| Sumario: | Normal-form two-player games are categorized by players into K analogy classes so as to minimize the prediction error about the behaviour of the opponent. This results in Clustered Analogy-Based Expectation Equilibria in which strategies are analogy-based expectation equilibria given the analogy partitions and analogy partitions minimize the prediction errors given the strategies. We distinguish between environments with self-repelling analogy partitions in which some mixing over partitions is required and environments with self-attractive partitions in which several analogy partitions can arise, thereby suggesting new channels of belief heterogeneity and equilibrium multiplicity. Various economic applications are discussed. |
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