Algorithms for cautious reasoning in games

Geir B. Asheim, Andrés Perea y Monsuwé

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

We provide comparable algorithms for the Dekel-Fudenberg procedure, iterated admissibility, proper rationalizability and full permissibility by means of the notions of likelihood orderings and preference restrictions. The algorithms model reasoning processes whereby each player's preferences over his own strategies are completed by eliminating likelihood orderings. We apply the algorithms for comparing iterated admissibility, proper rationalizability and full permissibility, and provide a sufficient condition under which iterated admissibility does not rule out properly rationalizable strategies. We also use the algorithms to examine an economically relevant strategic situation, namely a bilateral commitment bargaining game. Finally, we discuss the relevance of our algorithms for epistemic analysis.

Original languageEnglish
Pages (from-to)1241-1275
Number of pages35
JournalInternational Journal of Game Theory
Volume48
Issue number4
DOIs
Publication statusPublished - Dec 2019

JEL classifications

  • c72 - Noncooperative Games
  • c78 - "Bargaining Theory; Matching Theory"

Keywords

  • non-cooperative games
  • proper rationalizability
  • iterated admissibility
  • bargaining
  • Non-cooperative games
  • Proper rationalizability
  • PROPER RATIONALIZABILITY
  • ADMISSIBILITY
  • Bargaining
  • BEHAVIOR
  • LEXICOGRAPHIC PROBABILITIES
  • Iterated admissibility

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