Robust Predictions under Finite Depth of Reasoning
نویسندگان
چکیده
منابع مشابه
Finite Depth of Reasoning and Equilibrium Play
The standard framework for analyzing games with incomplete information models players as if they have an infinite depth of reasoning. This paper generalizes the type spaces of Harsanyi (1967–1968) so that players can have a finite depth of reasoning. We do this by restricting the set of events that a player of a finite depth can reason about. This allows us to extend the Bayesian-Nash equilibri...
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We introduce a model of strategic thinking in games of initial response. Unlike standard models of strategic thinking, in this framework the player’s ‘depth of reasoning’ is endogenously determined, and it can be disentangled from his beliefs over his opponent’s cognitive bound. In our approach, individuals act as if they follow a cost-benefit analysis. The depth of reasoning is a function of t...
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(a) Establish a necessary and su¢ cient condition for the ex post incentive compatibility of the e¢ cient allocation. Explicitly derive a transfer schedule that achieves the e¢ cient allocation with ex post incentive compatibility and ex post participation constraint (i.e. each bidder receives nonnegative net utility and to be precise zero net utility if s/he loses) in the direct revelation mec...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2014
ISSN: 1556-5068
DOI: 10.2139/ssrn.2459513