Working Papers by Po-Hsuan Lin
# | Title | Authors | Date | Length | Paper | Abstract | |
---|---|---|---|---|---|---|---|
1467 | A Note on Cursed Sequential Equilibrium and Sequential Cursed Equilibrium | Fong, Meng-Jhang Lin, Po-Hsuan Palfrey, Thomas R. | 04/11/2023 | 27 | SSWP_1467.pdf | In this short note, we compare the cursed sequential equilibrium (CSE) by Fong et al. (2023) and the sequential cursed equilibrium (SCE) by Cohen and Li (2023). We identify eight main differences between CSE and SCE with respect to the following features:
(1) the family of applicable games, (2) the number of free parameters, (3) the belief updating process, (4) the treatment of public histories, (5) effects in games of complete information, (6) violations of subgame perfection and sequential rationality, (7) re-labeling of actions, and (8) effects in one-stage simultaneous-move games. | |
1465 | Cursed Sequential Equilibrium | Fong, Meng-Jhang Lin, Po-Hsuan Palfrey, Thomas R. | 04/11/2023 | 61 | sswp1465_updated_041123.pdf | This paper develops a framework to extend the strategic form analysis of cursed equilibrium (CE) developed by Eyster and Rabin (2005) to multi-stage games. The approach uses behavioral strategies rather than normal form mixed strategies, and imposes sequential rationality. We define cursed sequential equilibrium (CSE) and compare it to sequential equilibrium and standard normal-form CE. We provide a general characterization of CSE and establish its properties. We apply CSE to five applications in economics and political science. These applications illustrate a wide range of differences between CSE and Bayesian Nash equilibrium or CE: in signaling games; games with preplay communication; reputation building; sequential voting; and the dirty faces game where higher order beliefs play a key role. A common theme in several of these applications is showing how and why CSE implies systematically different behavior than Bayesian Nash equilibrium in dynamic games of incomplete information with private values, while CE coincides with Bayesian Nash equilibrium for such games. | |
1460 | Cognitive Hierarchies in Extensive Form Games | Lin, Po-Hsuan Palfrey, Thomas R. | 08/10/2022 | 47 | sswp1460_updated_081022.pdf | The cognitive hierarchy (CH) approach posits that players in a game are heterogeneous with respect to levels of strategic sophistication. A level-k player believes all other players in the game have lower levels of sophistication distributed from 0 to k- 1, and these beliefs correspond to the truncated distribution of a \true" distribution of levels. We extend the CH framework to extensive form games, where these initial beliefs over lower levels are updated as the history of play in the game unfolds, providing information to players about other players' levels of sophistication. For a class of centipede games with a linearly increasing pie, we fully characterize the dynamic CH solution and show that it leads to the game terminating earlier than in the static CH solution for the centipede game in reduced normal form. |