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Research Article
Approximation of Nash equilibria in Bayesian games
Article first published online: 26 NOV 2008
DOI: 10.1002/jae.1040
Copyright © 2008 John Wiley & Sons, Ltd.
Issue
1099-1255/asset/cover.gif?v=1&s=b1b203dd8cf20555a0543e60a483d83867056b48 "Journal of Applied Econometrics")
Journal of Applied Econometrics
Special Issue: The Econometrics of Auctions
Volume 23, Issue 7, pages 965–981, November/December 2008
Additional Information
How to Cite
Armantier, O., Florens, J.-P. and Richard, J.-F. (2008), Approximation of Nash equilibria in Bayesian games. J. Appl. Econ., 23: 965–981. doi: 10.1002/jae.1040
Publication History
- Issue published online: 26 NOV 2008
- Article first published online: 26 NOV 2008
Funded by
- National Science Foundation. Grant Number: SBR-9601220.
Abstract
We define a new concept of constrained strategic equilibrium (CSE) for Bayesian games. We show that a sequence of CSEs approximates an equilibrium under standard conditions. We also provide an algorithm to implement the CSE approximation method numerically in a broad class of Bayesian games, including games without analytically tractable solutions. Finally, we illustrate the flexibility of the CSE approximation with a series of auction examples, including a complex multi-unit auction. Copyright © 2008 John Wiley & Sons, Ltd.