Expectation Conformity in Strategic Cognition by Alessandro Pavan

Join us for the first event of the Microeconomics Research Seminar Series, Autumn Term 2022.

Professor Alessandro Pavan from the Department of Economics, Northwestern University will present their research on Screening and Information-Sharing. 

Abstract 

The paper studies “cognitive games,” that is, games in which the players can influence their understanding of a strategic situation before playing the primitive (normal- or extensive-form) game. The analysis covers both the case of self-directed cognition (as when a player controls her own information structure) and the case of manipulative cognition (as when a player influences her opponents’ understanding of the game). We introduce the concept of expectation conformity and show how the latter, together with its decomposition into unilateral expectation conformity and increasing differences, sheds light on the choice of the cognitive structures (both on and off the equilibrium path) and on the sensitivity of the cognitive postures to the type of strategic interaction (e.g., complements vs substitutes). We show that constant-sum games never give rise to self-fulfilling cognition. By contrast, the latter emerges in many non-constant-sum games, both when cognition is self-directed and takes the form of “sparsity,” noisy information acquisition, or “espionage,” and when it is manipulative and takes the form of framing, signal jamming, noisy disclosures, and counter-intelligence. We also discuss the role that expectation conformity plays in games with boundedly-rational players such as those considered in the level-k literature.

This seminar will be held at the Colchester Campus in the Economics Common Room (5B.307). This event is open to all levels of study and is also open to the public. To register your place and gain access to the webinar, please contact the seminar organisers.

This event is part of the Microeconomics Research Seminar Series.