Irrationality and ambiguity in extensive games
Date
2017-03
Authors
Stauber, Ronald
Journal Title
Journal ISSN
Volume Title
Publisher
Elsevier
Abstract
Based on a model where deviations from equilibrium play are assumed to identify irrational players who are characterized by ambiguous set-valued strategies, this paper introduces an equilibrium notion for extensive games with ambiguity averse players that yields a precise interpretation for the counterfactual reasoning usually associated with backward induction. The resulting equilibria are always Nash equilibria, but may not satisfy the conditions required for various refinements of Nash equilibrium, including those for subgame perfection. Existence of such equilibria is proved for all two-player games, and for N-player games with perfect information.
Description
Keywords
Extensive games, Ambiguity, Maxmin, Backward induction
Citation
Collections
Source
Games and Economic Behavior
Type
Journal article
Book Title
Entity type
Access Statement
Open Access
License Rights
DOI
10.1016/j.geb.2017.01.010
Restricted until
2037-12-31