Aggregate Efficiency in Games
Fuente:
arXiv
Salvato in:
| Autore principale: | |
|---|---|
| Natura: | Preprint |
| Pubblicazione: |
2025
|
| Soggetti: | |
| Accesso online: | |
| Tags: |
Aggiungi Tag
Nessun Tag, puoi essere il primo ad aggiungerne!!
|
| _version_ | 1866910022517129216 |
|---|---|
| author | Mudekereza, Florian |
| author_facet | Mudekereza, Florian |
| contents | We show that, in large population games, decentralized information aggregation generically corrects for individual-level biases. This establishes a new testable aggregate efficiency benchmark where the behavior of boundedly rational agents mimics that of fully rational agents. However, we find that structural economic forces such as strategic network formation and profit-maximizing platforms can systematically select pathological environments to exploit individuals' biases, thereby causing aggregate inefficiencies. We characterize these inefficiencies in monopoly and labor markets. Our findings therefore suggest that policy should shift focus from correcting individuals' behavior to monitoring and regulating information structures. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2501_13019 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Aggregate Efficiency in Games Mudekereza, Florian Theoretical Economics We show that, in large population games, decentralized information aggregation generically corrects for individual-level biases. This establishes a new testable aggregate efficiency benchmark where the behavior of boundedly rational agents mimics that of fully rational agents. However, we find that structural economic forces such as strategic network formation and profit-maximizing platforms can systematically select pathological environments to exploit individuals' biases, thereby causing aggregate inefficiencies. We characterize these inefficiencies in monopoly and labor markets. Our findings therefore suggest that policy should shift focus from correcting individuals' behavior to monitoring and regulating information structures. |
| title | Aggregate Efficiency in Games |
| topic | Theoretical Economics |
| url | https://arxiv.org/abs/2501.13019 |