Jehiel, Philippe;
Weber, Giacomo;
(2025)
Endogenous Clustering and Analogy-Based Expectation Equilibrium.
Review of Economic Studies
, Article rdaf054. 10.1093/restud/rdaf054.
(In press).
![[thumbnail of JW13May2025.pdf]](https://discovery.ucl.ac.uk/style/images/fileicons/text.png) |
Text
JW13May2025.pdf - Accepted Version Access restricted to UCL open access staff until 3 July 2026. Download (593kB) |
Abstract
Normal-form two-player games are categorized by players into K analogy classes so as to minimize the prediction error about the behaviour of the opponent. This results in Clustered Analogy-Based Expectation Equilibria in which strategies are analogy-based expectation equilibria given the analogy partitions and analogy partitions minimize the prediction errors given the strategies. We distinguish between environments with self-repelling analogy partitions in which some mixing over partitions is required and environments with self-attractive partitions in which several analogy partitions can arise, thereby suggesting new channels of belief heterogeneity and equilibrium multiplicity. Various economic applications are discussed.
| Type: | Article |
|---|---|
| Title: | Endogenous Clustering and Analogy-Based Expectation Equilibrium |
| DOI: | 10.1093/restud/rdaf054 |
| Publisher version: | https://doi.org/10.1093/restud/rdaf054 |
| Language: | English |
| Additional information: | This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions. |
| Keywords: | Analogy-based Expectation Equilibrium, Business & Economics, Economics, GAMES, K-means clustering, Prototype theory, Social Sciences |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL SLASH UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10212595 |
Archive Staff Only
 |
View Item |
