SMU SOE Seminar (August 10, 2023): Perceived Competition

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ABSTRACT We consider economic situations in which agents have imperfect knowledge about the set of agents they are in competition with. Imperfect knowledge is captured through a directed graph that we call a perception network. We introduce an equilibrium concept, Perception-Consistent Equilibrium (PCE), a self-confirming equilibrium in which agents only perceive local competitors. We show that, at each PCE, agents' action levels are proportional to their eigenvector centrality in the perception network. Inactivity in parts of the perception network remains salient, even at the unique stable PCE. Our model can explain why some individuals living in closed communities (such as criminal gangs) make decisions only based on their local environment while others are more aware of the global competition they are facing. Click here to view the CV.
		PRESENTER Yan Long Huazhong University of Science and Technology
		RESEARCH FIELDS Microeconomic Theory Game Theory Market Design Electricity Market
		DATE: 10 August 2023 (Thursday)
		TIME: 4pm - 5.30pm
		VENUE: Meeting Room 5.1, Level 5 School of Economics Singapore Management University 90 Stamford Road Singapore 178903