Fictitious play in coordination games

We study the Fictitious Play process with bounded and unbounded recall in pure coordination games for which failing to coordinate yields a payoff of zero for both players. It is shown that every Fictitious Play player with bounded recall may fail to coordinate against his own type. On the other hand, players with unbounded recall are shown to coordinate (almost surely) against their own type as well as against players with bounded recall. In particular, this implies that a FP player's realized average utility is (almost surely) at least as large as his minmax payoff in 2×2 coordination games.

Authors and Affiliations

1. Department of Economics, Ben-Gurion University of the Negev, P.O.B 653, Beer-Sheva 84105, Israel (e-mail: anersela@bgumail.bgu.ac.il), , , , , , IL

   Aner Sela

2. Wirtschaftstheorie III, Department of Economics, University of Bonn, Adenauerallee 24-26, D-53113 Bonn, Germany (e-mail: herreine@econ3.uni-bonn.de), , , , , , DE

   Dorothea Herreiner

Received: December 1997/Final version: November 1998

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