Quantal Response Equilibrium with Symmetry: Representation and Applications

Speaker
Evan Friedman, University of Essex
Date
31/05/2022 - 13:00 - 11:30Add To Calendar 2022-05-31 11:30:00 2022-05-31 13:00:00 Quantal Response Equilibrium with Symmetry: Representation and Applications We study an axiomatic variant of quantal response equilibrium (QRE) for normal form games that augments the regularity axioms (Goeree et al., 2005) with various forms of “symmetry” across players and actions. The model refines regular QRE, implies bounds on logit QRE, and is tractable in many applications. The main result is a representation theorem that characterizes the model’s set-valued predictions by taking unions and intersections of simple sets. We completely characterize the predictions for (almost) all 2x2 games, a corollary of which is to show, in coordination games, which Nash equilibrium is selected by the principal branch of the logit correspondence. As applications, we consider three classic games: public goods provision with heterogenous costs of participation, jury voting with unanimity, and the infinitely repeated prisoner’s dilemma. For each, we characterize all equilibria within a particular large class. An analysis of existing experimental data shows the potential, and limitations, of the model. Joint with Felix Mauersberger Links to the paper, the seminar recording, and the slides. Zoom (https://us02web.zoom.us/j/82536086839) and it will be broadcasted in the Economics lounge room אוניברסיטת בר-אילן - Department of Economics Economics.Dept@mail.biu.ac.il Asia/Jerusalem public
Place
Zoom (https://us02web.zoom.us/j/82536086839) and it will be broadcasted in the Economics lounge room
Affiliation
http://www.evankfriedman.com/
Abstract

We study an axiomatic variant of quantal response equilibrium (QRE) for normal form games that augments the regularity axioms (Goeree et al., 2005) with various forms of “symmetry” across players and actions. The model refines regular QRE, implies bounds on logit QRE, and is tractable in many applications. The main result is a representation theorem that characterizes the model’s set-valued predictions by taking unions and intersections of simple sets. We completely characterize the predictions for (almost) all 2x2 games, a corollary of which is to show, in coordination games, which Nash equilibrium is selected by the principal branch of the logit correspondence. As applications, we consider three classic games: public goods provision with heterogenous costs of participation, jury voting with unanimity, and the infinitely repeated prisoner’s dilemma. For each, we characterize all equilibria within a particular large class. An analysis of existing experimental data shows the potential, and limitations, of the model.

Joint with Felix Mauersberger

Links to the paper, the seminar recording, and the slides.

Last Updated Date : 06/06/2022