Learning to Coordinate whit Heterogeneous Belief-Formation

Name: Learning to Coordinate whit Heterogeneous Belief-Formation
Brand: Vita e Pensiero
Price: 6.00 EUR
Availability: OnlineOnly

digital

Article

Magazine

RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI

Issue

RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI - 2005 - 3

Title

Learning to Coordinate whit Heterogeneous Belief-Formation

Authors

Takako Fujiwara-Greve, Carsten Krabbe Nielsen

Publisher

Vita e Pensiero

Format

Article |

Pdf

Pages

Online from

07-2005

Issn

0035-676X (print) | 1827-7918 (digital)

€ 6.00

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Description

Experiments show that players with identical information and objectives have heterogeneous behavior rules. We formulate how different beliefs arise from the same information and analyze how heterogeneous belief formation affects learning outcomes of two-person two-action coordination games. With heterogeneous belief formation, it is possible to generate enough diversity in actions for eventual coordination, which is impossible under the ordinary adaptive learning model. When each player uses the same function to compute a belief over time, diversity of belief formation functions within or across populations is suffcient for convergence to coordination. When players choose belief-formation functions as well as actions over time, diverse adjustment of belief-formation functions is suffcient. A risk-dominant equilibrium is more likely to emerge than a payoff-dominant equilibrium since the former is more likely to be predicted by the players.