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Evolutionary Game Theory
, 1995
"... Abstract. Experimentalists frequently claim that human subjects in the laboratory violate gametheoretic predictions. It is here argued that this claim is usually premature. The paper elaborates on this theme by way of raising some conceptual and methodological issues in connection with the very def ..."
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Cited by 642 (9 self)
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Abstract. Experimentalists frequently claim that human subjects in the laboratory violate gametheoretic predictions. It is here argued that this claim is usually premature. The paper elaborates on this theme by way of raising some conceptual and methodological issues in connection with the very definition of a game and of players ’ preferences, in particular with respect to potential context dependence, interpersonal preference dependence, backward induction and incomplete information.
Admissibility and common belief
, 2003
"... The concept of ‘fully permissible sets’ is defined by an algorithm that eliminates strategy subsets. It is characterized as choice sets when there is common certain belief of the event that each player prefer one strategy to another if and only if the former weakly dominates the latter on the set of ..."
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Cited by 10 (6 self)
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The concept of ‘fully permissible sets’ is defined by an algorithm that eliminates strategy subsets. It is characterized as choice sets when there is common certain belief of the event that each player prefer one strategy to another if and only if the former weakly dominates the latter on the set of all opponent strategies or on the union of the choice sets that are deemed possible for the opponent. The concept refines the Dekel–Fudenberg procedure and captures aspects of forward induction.
Subjective reasoning  dynamic games
, 2005
"... A unified framework is developed for representation of, and reasoning about dynamic games. A game is described by the subjective knowledge of players at hypothetical situations—the epistemic game form. Subjective knowledge—termed confidence—allows us to replace objective reasoning about hypothetical ..."
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Cited by 6 (3 self)
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A unified framework is developed for representation of, and reasoning about dynamic games. A game is described by the subjective knowledge of players at hypothetical situations—the epistemic game form. Subjective knowledge—termed confidence—allows us to replace objective reasoning about hypothetical events with reasoning about the confidence of hypothetical identities, i.e., the subjective reasoning of players in hypothetical situations. This leads to an endogenous definition for players’ action sets. Applying subjective reasoning to games such as the “Beer–Quiche ” signaling game, provides a characterization of the dynamic reasoning by players that leads to the suggested solutions for these games. For perfect information games we find that rationality and common confidence of future rationality imply backward induction, although common confidence of rationality can logically contradict the definition of the game.
DEDUCTIVE REASONING IN EXTENSIVE GAMES
, 2003
"... We justify the application to extensive games of a model of deductive reasoning based on three key features: ‘caution’, ‘full belief of opponent rationality’, and ‘no extraneous restrictions on beliefs’. We apply the model to several examples, and show that it yields novel economic insights. The app ..."
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Cited by 3 (1 self)
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We justify the application to extensive games of a model of deductive reasoning based on three key features: ‘caution’, ‘full belief of opponent rationality’, and ‘no extraneous restrictions on beliefs’. We apply the model to several examples, and show that it yields novel economic insights. The approach supports forward induction, without necessarily promoting backward induction.
Minimal Belief Revision leads to Backward Induction
, 2004
"... In this paper we present a model for games with perfect information in which the players, upon observing an unexpected move, may revise their beliefs about the opponents’ preferences over outcomes. For a given profile P of preference relations over outcomes, we impose the following three principles: ..."
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Cited by 1 (0 self)
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In this paper we present a model for games with perfect information in which the players, upon observing an unexpected move, may revise their beliefs about the opponents’ preferences over outcomes. For a given profile P of preference relations over outcomes, we impose the following three principles: (1) players initially believe that opponents have preference relations as specified by P; (2) players believe at every instance of the game that each opponent is carrying out an optimal strategy; and (3) beliefs about the opponents’ preference relations over outcomes should be revised in a minimal way. It is shown that every player whose preference relation is given by P, and who throughout the game respects common belief in the events (1), (2) and (3), has a unique optimal strategy, namely his backward induction strategy in the game induced by P. We finally show that replacing the minimal belief revision principle (3) by the more modest requirement of Bayesian updating leads exactly to the DekelFudenberg procedure in the game induced by P.
Working Paper Series in Economics and Finance, No 357
, 1999
"... Most literature on the hold–up problem starts from the assumption that ex post bargaining outcomes are insensitive to prior investment costs. We argue that this approach is unsatisfactory. If the bargaining procedure is relatively symmetric, it typically admits multiple perfect equilibria, some of w ..."
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Most literature on the hold–up problem starts from the assumption that ex post bargaining outcomes are insensitive to prior investment costs. We argue that this approach is unsatisfactory. If the bargaining procedure is relatively symmetric, it typically admits multiple perfect equilibria, some of which give the investor a high enough payoff to sustain efficient investment. Even if the bargaining procedure is asymmetric and rigged against the investor, there may be investment if agents are driven by moral concerns or if communication creates commitment. Laboratory experiments indicate that communication is necessary and sufficient for agents to coordinate on efficient outcomes when the bargaining game is symmetric. When the bargaining game is rigged against the investor, the hold–up problem is mitigated, but not eliminated, by moral behavior. Communication is quite credible, and we find that promises are more believable than threats. JEL classification: L14, C78.