Abstract
Self-confirming equilibria are limiting outcomes of purposeful interactions among a collection of adaptive agents, each of whom averages past data to approximate moments of conditional probability distributions. Self-confirming equilibria are powerful tools to investigate dynamic economic problems such as the limiting behaviour of learning systems, the selection of plausible equilibria in games and dynamic macroeconomic models, the incidence and distribution of rare events that occasionally arise as large deviations from self-confirming equilibria, and how agents respond to model uncertainty.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Bibliography
Aiyagari, R., A. Marcet, T.J. Sargent, and J. Seppälä. 2002. Optimal taxation without state-contingent debt. Journal of Political Economy 110: 1220–1254.
Bray, M.M. 1982. Learning, estimation and the stability of rational expectations. Journal of Economic Theory 26: 318–339.
Cho, I.-K. and K. Kasa. 2006. Learning and model validation. Working paper, University of Illinois and Simon Fraser University.
Cho, I.-K., N. Williams, and T.J. Sargent. 2002. Escaping Nash inflation. Review of Economic Studies 69: 1–40.
Dekel, E., D. Fudenberg, and D.K. Levine. 1999. Payoff information and self-confirming equilibrium. Journal of Economic Theory 89: 165–185.
Evans, G.W., and S. Honkapohja. 2001. Learning and expectations in macroeconomics. Princeton: Princeton University Press.
Fudenberg, D., and D.M. Kreps. 1993. Learning mixed equilibria. Games and Economic Behavior 5: 320–367.
Fudenberg, D., and D.M. Kreps. 1995. Learning in extensive games, I: Self-confirming and Nash equilibrium. Games and Economic Behavior 8: 20–55.
Fudenberg, D., and D.K. Levine. 1993. Self-confirming equilibrium. Econometrica 61: 523–545.
Fudenberg, D., and D. Levine. 1998. Learning in games. Cambridge, MA: MIT Press.
Kreps, D.M. 1998. Anticipated utility and dynamic choice. In Frontiers of research in economic theory: The Nancy L. Schwartz memorial lectures, 1983–1997, ed. D.P. Jacobs, E. Kalai, and M.I. Kamien. Cambridge: Cambridge University Press.
Marcet, A., and T.J. Sargent. 1989. Convergence of least squares learning mechanisms in self referential linear stochastic models. Journal of Economic Theory 48: 337–368.
Milgrom, P., and D.J. Roberts. 1990. Rationalizability, learning and equilibrium in games with strategic complementarities. Econometrica 58: 1255–1277.
Milgrom, P., and D.J. Roberts. 1991. Adaptive and sophisticated learning in normal form games. Games and Economic Behavior 3: 82–100.
Pandit, C., and S.P. Meyn. 2006. Worst-case large-deviations with application to queueing and information theory. Stochastic Process and their Applications 116: 724–756.
Sargent, T.J. 1999. The conquest of American inflation. Princeton: Princeton University Press.
Woodford, M.D. 1990. Learning to believe in sunspots. Econometrica 58: 277–307.
Author information
Authors and Affiliations
Editor information
Copyright information
© 2018 Macmillan Publishers Ltd.
About this entry
Cite this entry
Cho, IK., Sargent, T.J. (2018). Self-confirming Equilibria. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2130
Download citation
DOI: https://doi.org/10.1057/978-1-349-95189-5_2130
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-95188-8
Online ISBN: 978-1-349-95189-5
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences