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Pré-Publication, Document De Travail Année : 2021

Overcoming Free-Riding in Bandit Games

Résumé

This paper considers a class of experimentation games with L´evy bandits encompassing those of Bolton and Harris (1999) and Keller, Rady and Cripps (2005). Its main result is that efficient (perfect Bayesian) equilibria exist whenever players’ payoffs have a diffusion component. Hence, the trade-offs emphasized in the literature do not rely on the intrinsic nature of bandit models but on the commonly adopted solution concept (MPE). This is not an artifact of continuous time: we prove that such equilibria arise as limits of equilibria in the discretetime game. Furthermore, it suffices to relax the solution concept to strongly symmetric equilibrium.
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Dates et versions

hal-03187515 , version 1 (01-04-2021)

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  • HAL Id : hal-03187515 , version 1

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Johannes Hörner, Nicolas Klein, Sven Rady. Overcoming Free-Riding in Bandit Games. 2021. ⟨hal-03187515⟩
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