A minority game with bounded recall

Renault, Jérôme; Scarsini, Marco; Tomala, Tristan

Renault, Jérôme; Scarsini, Marco; Tomala, Tristan (2007), A minority game with bounded recall, Mathematics of Operations Research, 32, 4, p. 873-889. http://dx.doi.org/10.1287/moor.1070.0284

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Type

Article accepté pour publication ou publié

Date

2007

Journal name

Mathematics of Operations Research

Volume

Number

Publisher

INFORMS

Pages

873-889

Abstract (EN)

This paper studies a repeated minority game with public signals, symmetric bounded recall, and pure strategies. We investigate both public and private equilibria of the game with fixed recall size. We first show how public equilibria in such a repeated game can be represented as colored subgraphs of a de Bruijn graph. Then we prove that the set of public equilibrium payoffs with bounded recall converges to the set of uniform equilibrium payoffs as the size of the recall increases. We also show that private equilibria behave badly: A private equilibrium payoff with bounded recall need not be a uniform equilibrium payoff.

Subjects / Keywords

folk theorem; de Bruijn sequence; imperfect monitoring; uniform equilibrium; public equilibrium; private equilibrium

JEL

C44 - Operations Research; Statistical Decision Theory