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Nash Equilibrium Without Mutual Knowledge of Rationality

Lo, Kin Chung - 1999

In a Nash equilibrium, players' rationality is mutual knowledge. However, both intuition and experimental evidence … suggest that players do not know for sure the rationality of opponents. This paper proposes a new equilibrium concept … equilibrium, players do not necessarily know the rationality of opponents, but they view rationality as infinitely more likely …

Persistent link: https://www.econbiz.de/10014179636

Rationalizable implementation of correspondences

Kunimoto, Takashi; Serrano, Roberto - 2016 - This version: May 2016

We come close to characterizing the class of social choice correspondences that are implementable in rationalizable strategies. We identify a new condition, which we call set-monotonicity, and show that it is necessary and almost sufficient for rationalizable implementation. Set-monotonicity is...

Persistent link: https://www.econbiz.de/10011483605

Rationalizable partition-confirmed equilibrium

Fudenberg, Drew; Kamada, Yuichiro - In: Theoretical economics : TE ; an open access journal in … 10 (2015) 3, pp. 775-806

extensive-form games, when rationality is common knowledge and players observe a partition of the terminal nodes. RPCE allows …

Persistent link: https://www.econbiz.de/10011673255

Rational Inattention Dynamics in Stochastic Games : Coordination and Conditioning

Karapanagiotis, Pantelis - 2021

Decision-makers that choose information strategies instead of concrete actions elect stochastic choice rules that leave open the potential for errors, which can obfuscate the strategic interactions of players. This article establishes that dynamic, stochastic, games with rationally inattentive...

Persistent link: https://www.econbiz.de/10013232311

Bayesian repeated games and reputations

Forges, Françoise; Salomon, Antoine - 2014

Under appropriate assumptions (private values and uniform punishments), the Nash equilibria of a Bayesian repeated game without discounting are payoff-equivalent to tractable, completely revealing, equilibria and can be achieved as interim cooperative solutions of the initial Bayesian game. This...

Persistent link: https://www.econbiz.de/10010256693

Generic Uniqueness and Continuity of Rationalizable Strategies

Yildiz, Muhamet - 2005

For a finite set of actions and a rich set of fundamentals, consider the rationalizable actions on a universal type space, endowed with the usual product topology. (1) Generically, there exists a unique rationalizable action profile. (2) Every model can be approximately embedded in a...

Persistent link: https://www.econbiz.de/10014064951

Best experienced payoff dynamics and cooperation in the centipede game

Sandholm, William H.; Izquierdo, Segismundo S.; … - In: Theoretical economics : TE ; an open access journal in … 14 (2019) 4, pp. 1347-1385

We study population game dynamics under which each revising agent tests each of his strategies a fixed number of times, with each play of each strategy being against a newly drawn opponent, and chooses the strategy whose total payoff was highest. In the Centipede game, these best experienced...

Persistent link: https://www.econbiz.de/10012158817

Non-cooperative games

Damme, Eric E. C. van - 2014

Persistent link: https://www.econbiz.de/10011285514

The Rationality of Irrationality for Managers : Returns-Based Beliefs and the Traveler's Dilemma

Velu, Chander K. - 2009

This paper discusses the importance of paradoxes of irrationality for managers by elaborating upon the rational basis for the adoption of non-equilibrium strategies in game theory. It does so by revisiting the one-shot Traveler's Dilemma game, proposing a solution which reconciles the anomaly...

Persistent link: https://www.econbiz.de/10012719536

Existence of equilibria in auctions with private values

Govindan, Srihari; Wilson, Robert - 2010 - Rev. July 2010

A first-price sealed-bid auction of an item for which bidders are risk-neutral and have privately known values is shown to have an equilibrium in mixed behavioral strategies if the joint distribution of bidders' values has a continuous density on a cubical support. Such an equilibrium has...

Persistent link: https://www.econbiz.de/10003991784