nep-gth New Economics Papers
on Game Theory
Issue of 2005‒03‒06
six papers chosen by
Gerald Pech
NUI Galway

  1. A Learning Theory for the Concept of Harsanyi-Nash Equilibrium in Stochastic Games with Bayesian Players By LEONI PATRICK
  2. Learning in and about Games By Anke Gerber
  3. Interim Rationalizability By Eddie Dekel; Drew Fudenberg; Stephen Morris
  4. Agent-Based Modelling: A Methodology for Neo-Schumpeterian Economics By Andreas Pyka; Giorgio Fagiolo
  5. Axiomatic Foundations for Satisficing Behavior By Christopher J.Tyson
  6. Many-to-one Matching When Colleagues Matter By Pablo Revilla

    Abstract: This paper investigates simultaneous learning about both nature and others' actions in stochastic games, and identifies a set of suffcient conditions assuring that equilibrium actions played by Bayesian agents become eventually arbitrarily close to a Harsanyi-Nash equilibrium. We assume that players have prior beliefs about both nature' drawings and other players' strategies, which are not necessarily exact. Provided that 1) every player maximizes his own expected sum of discounted one-period utility against their own beliefs, 2) every player updates his beliefs in a Bayesian manner, 3) prior beliefs about both nature' drawings and other players' strategies have a grain of truth and 4) beliefs about nature' drawings are independent of actions taken by the players during the game, we show that after some finite time the equilibrium outcome of the above game is arbitrarily close to a Harsanyi-Nash equilibrium, where priors beliefs are assumed to be exact. Therefore, the result strictly extends the results in Kalai and Lehrer [8] to stochastic games with learning about nature as well as others' actions, and it provides a learning theory for the concept of Harsanyi-Nash equilibrium in such games.
    Date: 2003–05
  2. By: Anke Gerber
    Abstract: We study finitely repeated 2 / 2 normal form games, where players have incomplete information about their opponents’ payoffs. In a laboratory experiment we investigate whether players (a) learn the game they are playing, (b) learn to predict the behavior of their opponent, and (c) learn to play according to a Nash equilibrium of the repeated game. Our results show that the success in learning the opponent’s type depends on the characteristics of the true game. The learning success is much higher for games with pure strategy Nash equilibria than for games with a unique mixed strategy Nash equilibrium, and it is higher for games with symmetric pure strategy Nash equilibria than for games with asymmetric equilibria. Moreover, subjects learn to predict the opponents’ behavior very well. However, they rarely play according to a Nash equilibrium and we observe no correlation between equilibrium play and learning about the game.
    Keywords: Learning, game theory, incomplete information, experiments
    JEL: C72 C92 D83
  3. By: Eddie Dekel; Drew Fudenberg; Stephen Morris
    Date: 2005–02–25
  4. By: Andreas Pyka (University of Augsburg, Department of Economics); Giorgio Fagiolo (Laboratory of Economics and Management, Pisa (Italy))
    Abstract: Modellers have had to wrestle with an unavoidable trade-off between the demand of a general theoretical approach and the descriptive accuracy required to model a particular phenomenon. A new class of simulation models has shown to be well adapted to this challenge, basically by shifting outwards this trade-off: So-called agent-based models (ABMs henceforth) are increasingly used for the modelling of socio-economic developments. Our paper deals with the new requirements for modelling entailed by the necessity to focus on qualitative developments, pattern formation, etc. which is generally highlighted within Neo-Schumpeterian Economics and the possibilities given by ABMs.
    Keywords: Simulation, Neo-Schumpeterian Economics, Agents
    JEL: B52 O30
    Date: 2005–02
  5. By: Christopher J.Tyson (Nuffield College, Oxford)
    Abstract: A theory of decision making is proposed that supplies an axiomatic basis for the concept of "satisficing" postulated by Herbert Simon. After a detailed review of classical results that characterize several varieties of preference-maximizing choice behavior, the axiomatization proceeds by weakening the inter-menu contraction consistency condition involved in these characterizations. This exercise is shown to be logically equivalent to dropping the usual cognitive assumption that the decision maker fully perceives his preferences among available alternatives, and requiring instead merely that his ability to perceive a given preference be weakly decreasing with respect to the relative complexity (indicated by set inclusion) of the choice problem at hand. A version of Simon's hypothesis then emerges when the notion of "perceived preference" is endowed with sufficiently strong ordering properties, and the axiomatization leads as well to a constraint on the form of satisficing that the decision maker may legitimately employ.
    Date: 2005–01–06
  6. By: Pablo Revilla (Universidad Pablo de Olavide)
    Abstract: This paper studies many-to-one matching markets in which each agent’s preferences not only depend on the institution that hires her, but also on the group of her colleagues, which are matched to the same institution. With an unrestricted domain of preferences the non-emptiness of the core is not guaranteed. We present some conditions on agents’ preferences which determine two possible situations. In both situations, at least one stable allocation exists. The first one reflects real-life situations in which the agents are more worried about an acceptable set of colleagues than the firm hiring them. The second one refers to markets in which a workers’ ranking is accepted by workers and firms in that market.
    Keywords: many-to-one matching, hedonic coalitions, stability.
    JEL: C78 D71
    Date: 2004

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