Abstract
We describe non-cooperative game models and discuss game theoretic solution
concepts. Some applications are also noted. Conventional theory focuses on the
question ‘how will rational players play?’, and has the Nash equilibrium at its core.
We discuss this concept and its interpretations, as well as refinements (perfect and
stable equilibria) and relaxations (rationalizability and correlated equilibria).
Motivated by experiments that show systematic theory violations, behavioral game
theory aims to integrate insights from psychology to get better answers to the
question ‘how do humans play?’. We provide an overview of the observed
regularities and briefly sketch (beginnings of) theories of boundedly rational play.
concepts. Some applications are also noted. Conventional theory focuses on the
question ‘how will rational players play?’, and has the Nash equilibrium at its core.
We discuss this concept and its interpretations, as well as refinements (perfect and
stable equilibria) and relaxations (rationalizability and correlated equilibria).
Motivated by experiments that show systematic theory violations, behavioral game
theory aims to integrate insights from psychology to get better answers to the
question ‘how do humans play?’. We provide an overview of the observed
regularities and briefly sketch (beginnings of) theories of boundedly rational play.
| Original language | English |
|---|---|
| Place of Publication | Tilburg |
| Publisher | CentER |
| Number of pages | 29 |
| Volume | 2014-077 |
| Publication status | Published - 1 Oct 2014 |
Publication series
| Name | CentER Discussion Paper |
|---|---|
| Volume | 2014-077 |
Keywords
- Backward induction
- behavioral economics
- correlated equilibrium
- decision
- experimental economics
- game
- game theory
- incomplete information
- noncooperative,
- perfect equilibrium
- rationality
- rationalizability
- sequential equilibrium
- stable equilibrium