We study models of learning in games where agents with limited memory use social information to decide when and how to change their play. When agents only observe the aggregate distribution of payoffs and only recall information from the last period, aggregate play comes close to Nash...

Some researchers have argued that anchoring in economic valuations casts doubt on the assumption of consistent and stable preferences. We present new evidence that questions the robustness of certain anchoring results. We then present a theoretical framework that provides insights into why we...

We study collusion within groups in noncooperative games. The primitives are the preferences of the players, their assignment to nonoverlapping groups, and the goals of the groups. Our notion of collusion is that a group coordinates the play of its members among different incentive compatible...

It is fashionable to criticize economic theory for focusing too much on rationality and ignoring the imperfect and emotional way in which real economic decisions are reached. All of us facing the global economic crisis wonder just how rational economic men and women can be. Behavioral economics...

We define and analyze a "strategic topology'' on types in the Harsanyi-Mertens-Zamir universal type space, where two types are close if their strategic behavior is similar in all strategic situations. For a fixed game and action define the distance between a pair of types as the difference...

This paper proposes the solution concept of interim correlated rationalizability, and shows that all types that have the same hierarchies of beliefs have the same set of interim-correlated-rationalizable outcomes. This solution concept characterizes common certainty of rationality in the...

Rationalizable partition-confirmed equilibrium (RPCE) describes the steady state outcomes of rational learning in extensive-form games, when rationality is common knowledge and players observe a partition of the terminal nodes. RPCE allows players to make inferences about unobserved play by...

We study learning and information acquisition by a Bayesian agent whose prior belief is misspecified in the sense that it assigns probability 0 to the true state of the world. At each instant, the agent takes an action and observes the corresponding payoff, which is the sum of a fixed but...

We de.ne and analyze a strategic topology on types in the Harsanyi-Mertens-Zamir universal type space, where two types are close if their strategic behavior is similar in all strategic situations. For a .xed game and action de.ne the distance be-tween a pair of types as the diþerence between...