Abstract
Considering heterogeneous rationality of the player presents in many aspects, including decision rules, beliefs and cognitive ability et al., the heterogeneity in cognitive ability is often neglected in general bounded rationality models. We embellish the basic model of fictitious play with the heterogeneous cognitive hierarchy approach. Giving players learning rules, players with heterogeneous cognitive hierarchy will choose different actions. We study the effects of payoff structure, cognitive hierarchy and initial beliefs on the equilibrium and convergence about the evolution process. A numeral example is given to illustrate how the improved model can solve the problem of traditional fictitious play in some sense such as cycle choice.
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