Exogenous empirical-evidence equilibria in perfect-monitoring repeated games yield correlated equilibria

Nicolas Dudebout, Jeff S. Shamma

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

This paper proves that exogenous empirical-evidence equilibria (xEEEs) in perfect-monitoring repeated games induce correlated equilibria of the associated one-shot game. An empirical-evidence equilibrium (EEE) is a solution concept for stochastic games. At equilibrium, agents' strategies are optimal with respect to models of their opponents. These models satisfy a consistency condition with respect to the actual behavior of the opponents. As such, EEEs replace the full-rationality requirement of Nash equilibria by a consistency-based bounded-rationality one. In this paper, the framework of empirical evidence is summarized, with an emphasis on perfect-monitoring repeated games. A less constraining notion of consistency is introduced. The fact that an xEEE in a perfect-monitoring repeated game induces a correlated equilibrium on the underlying one-shot game is proven. This result and the new notion of consistency are illustrated on the hawk-dove game. Finally, a method to build specific correlated equilibria from xEEEs is derived.
Original languageEnglish (US)
Title of host publication53rd IEEE Conference on Decision and Control
PublisherInstitute of Electrical and Electronics Engineers (IEEE)
Pages1167-1172
Number of pages6
ISBN (Print)9781467360906
DOIs
StatePublished - Feb 17 2015

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