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Independent Mistakes In Large Games

Posted: 22 Jan 2001  

Ady Pauzner

Tel Aviv University - Eitan Berglas School of Economics

Abstract

Economic models usually assume that agents play precise best responses to others' actions. It is sometimes argued that this is a good approximation when there are many agents in the game, because if their mistakes are independent, aggregate uncertainty is small. We study a class of games in which players' payoffs depend solely on their individual actions and on the aggregate of all players' actions. We investigate whether their equilibria are affected by mistakes when the number of players becomes large. Indeed, in generic games with continuous payoff functions, independent mistakes wash out in the limit. This may not be the case if payoffs are discontinuous. As a counter-example we present the n players Nash bargaining game, as well as a large class of "free-rider games".

Key words: Large games ? independent mistakes ? trembles ? free rider

JEL Classification: C70, C78

Suggested Citation

Pauzner, Ady, Independent Mistakes In Large Games. International Journal of Game Theory, Vol. 29, No. 2. Available at SSRN: https://ssrn.com/abstract=236488

Ady Pauzner (Contact Author)

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel
972-3-640-9297 (Phone)
972-3-640-9908 (Fax)

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