Repeated Congestion Games with Bounded Rationality

Posted: 12 Mar 2012 Last revised: 13 Jul 2013

See all articles by Marco Scarsini

Marco Scarsini

Luiss University Dipartimento di Economia e Finanza

Tristan Tomala

HEC Paris - Economics & Decision Sciences

Date Written: March 10, 2012

Abstract

We consider a repeated congestion game with imperfect monitoring. At each stage, each player chooses to use some facilities and pays a cost that increases with the congestion. Two versions of the model are examined: a public monitoring setting where agents observe the cost of each available facility, and a private monitoring one where players observe only the cost of the facilities they use. A partial folk theorem holds: a Pareto-optimal outcome may result from selfish behavior and be sustained by a belief-free equilibrium of the repeated game. We prove this result assuming that players use strategies of bounded complexity and we estimate the strategic complexity needed to achieve efficiency. It is shown that, under some conditions on the number of players and the structure of the game, this complexity is very small even under private monitoring. The case of network routing games is examined in detail.

Keywords: Folk theorem, Braess’s paradox, Network routing games, Private monitoring, Public monitoring, Anonymous games, Strategic complexity, Contagion strategy, Calendar strategy

JEL Classification: C73

Suggested Citation

Scarsini, Marco and Tomala, Tristan, Repeated Congestion Games with Bounded Rationality (March 10, 2012). International Journal of Game Theory, Vol. 41, 2012, Available at SSRN: https://ssrn.com/abstract=2019678

Marco Scarsini (Contact Author)

Luiss University Dipartimento di Economia e Finanza ( email )

Viale Romania 32
Rome, RM 00197
Italy

Tristan Tomala

HEC Paris - Economics & Decision Sciences ( email )

1 rue de la Liberation
Paris, 78351
France

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