Unique Stationary Behavior
10 Pages Posted: 20 Aug 2015
Date Written: August 14, 2015
We study environments in which agents from a large population are randomly matched to play a one-shot game, and, before the interaction begins, each agent observes noisy information about the partner's aggregate behavior. Agents follow stationary strategies that depend on the observed signal. We show that every strategy distribution admits a unique behavior if each player observe on average less than action of his partner. On the other hand, if each player observes on average more than one action, we show that there exists a stationary strategy that admits multiple consistent outcomes.
Keywords: Markovian process, Random matching.
JEL Classification: C72, C73, D83
Suggested Citation: Suggested Citation