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459. Analysis of Information Feedback and Selfconfirming Equilibrium
by P. Battigalli, S. Cerreia-Vioglio, F. Maccheroni, M. Marinacci
Recent research emphasizes the importance of information feedback in situations of recurrent decisions and strategic interaction, showing how it affects the uncertainty that underlies selfconfi…rming equilibrium (e.g., Battigalli et al. [9, 2015], Fudenberg and Kamada [13, 2015]). Here, we discuss in detail several properties of this key feature of recurrent interaction and derive relationships. This allows us to elucidate our notion of Maxmin selfconfi…rming equilibrium, hereby agents are extremely ambiguity averse, and to compare it with the partially-speci…ed-probabilities (PSP) equilibrium of Lehrer [19, 2012]. Symmetric Maxmin selfcon…firming equilibrium in mixed strategies exists under either “observable payoffs,”or “separable feedback.”The latter assumption makes this equilibrium concept essentially equivalent to PSP-equilibrium. If observability of payoffs holds as well, then these equilibrium concepts collapse to mixed Nash equilibrium.

Keywords: Selfconfi…rming equilibrium, conjectural equilibrium, information feedback, ambiguity aversion, partially speci…ed probabilities.

JEL classification: C72, D80.

Last updated May 31, 2016