Bounded versus Unbounded Rationality: The Tyranny of the Weak*
نویسنده
چکیده
We examine the case of a two-person repeated game played by a boundedly rational player versus an unboundedly rational opponent. The former is restricted to strategies which are implementable by connected finite automata. It is shown that the “rational” player has a dominant strategy, and that in some cases the “weaker“ (boundedly rational) player may exploit this fact to “blackmail” him. It is also shown that for a repeated zero-sum game, the rational player has a strategy which drives the automaton player’s limit payoff down to his security (maxmin) level, even if he may choose any finite automaton. 0 19X9 Academic Press. Inc.
منابع مشابه
Investment decisions, equivalent risk and bounded rationality
The Net Present Value maximizing model has a respectable ancestry and is considered by most scholars a theoretically sound decision model. In real-life applications, decision makers use the NPV rule, but apply a subjectively determined hurdle rate, as opposed to the “correct” opportunity cost of capital. According to a heuristics-and-biases-program approach, this implies that the hurdle-rate ru...
متن کاملWhy Bounded Rationality?
NEARLY EVERYONE would see the truth as between Hamlet and Puck. Including Hamlet and Puck. Hamlet is feigning madness, and Puck is just being, well, puckish. Model-writing economists, however, tend not to the middle but to the “infinite in faculties” extreme. Although the postulate of unbounded rationality has dominated economic modeling for several decades, the dominance is relaxing. Is this e...
متن کاملSome results about unbounded convergences in Banach lattices
Suppose E is a Banach lattice. A net in E is said to be unbounded absolute weak convergent ( uaw-convergent, for short) to provided that the net convergences to zero, weakly. In this note, we further investigate unbounded absolute weak convergence in E. We show that this convergence is stable under passing to and from ideals and sublattices. Compatible with un-convergenc, we show that ...
متن کاملEXISTENCE OF A STEADY FLOW WITH A BOUNDED VORTEX IN AN UNBOUNDED DOMAIN
We prove the existence of steady 2-dimensional flows, containing a bounded vortex, and approaching a uniform flow at infinity. The data prescribed is the rearrangement class of the vorticity field. The corresponding stream function satisfies a semilinear elliptic partial differential equation. The result is proved by maximizing the kinetic energy over all flows whose vorticity fields are rearra...
متن کاملBifurcation of limit cycles from a quadratic reversible center with the unbounded elliptic separatrix
The paper is concerned with the bifurcation of limit cycles in general quadratic perturbations of a quadratic reversible and non-Hamiltonian system, whose period annulus is bounded by an elliptic separatrix related to a singularity at infinity in the poincar'{e} disk. Attention goes to the number of limit cycles produced by the period annulus under perturbations. By using the appropriate Picard...
متن کامل