Correlated equilibrium and behavioral conformity

Is conformity amongst similar individuals consistent with self-interested behavior? We consider a model of incomplete information in which each player receives a signal, interpreted as an allocation to a role, and can make his action choice conditional on his role. Our main result demonstrates that ‘near to’ any correlated equilibrium is an approximate correlated equilibrium ‘with conformity’ — that is, an equilibrium where all ‘similar players’ play the same strategy, have the same probability of being allocated to each role, and receive approximately the same payoff; in short, similar players ‘behave in an identical way’ and are treated nearly equally. To measure ‘similarity’ amongst players we introduce the notions of approximate substitutes and a (δ, Q)-class games — a game with Q classes of players where all players in the same class are δ-substitutes for each other.

Issue Date:
Nov 11 2004
Publication Type:
Working or Discussion Paper
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 Record created 2018-03-19, last modified 2020-10-28

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