A Necessary and Sufficient Condition for Convergence of Statistical to Strategic Equilibria of Market Games

Tsomocos, Dimitrios and Voliotis, Dimitris (2009) A Necessary and Sufficient Condition for Convergence of Statistical to Strategic Equilibria of Market Games. International Game Theory Review, 11 (4). pp. 479-489.

Abstract

We analyze a market game where traders are heterogeneous with respect to their rationality level and have asymmetric information. The market mechanism results into a statistical equilibrium, where traders randomise among their available actions due to their limited rationality. We provide a necessary and sufficient condition for convergence of statistical to strategic equilibria of market games, when traders become more informed and increasingly more rational.

Item Type: Article
Keywords: Market games; Bounded rationality; Rational learning; finance
Subject(s): Finance
Date Deposited: 25 Jan 2012 18:43
Last Modified: 09 Mar 2017 14:06
Funders: N/A
URI: http://eureka.sbs.ox.ac.uk/id/eprint/1852

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