Extensive Form Games with Uncertainty Averse Players
AbstractExisting equilibrium concepts for games make use of the subjective expected utility model axiomatized by Savage (1954) to represent players' preferences. Accordingly, each player's beliefs about the strategies played by opponents are represented by a probability measure. Motivated by the Ellsberg Paradox and relevant experimental findings demonstrating that the beliefs of a decision maker may not be representable by a probability measure, this paper generalizes Nash Equilibrium in finite extensive form games to allow for preferences conforming to the multiple priors model developed in Gilboa and Schmeidler (1989). The implications of this generalization for strategy choices and welfare are studied.
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Bibliographic InfoArticle provided by Elsevier in its journal Games and Economic Behavior.
Volume (Year): 28 (1999)
Issue (Month): 2 (August)
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Web page: http://www.elsevier.com/locate/inca/622836
Other versions of this item:
- Kin Chung Lo, 1995. "Extensive Form Games with Uncertainty Averse Players," Working Papers ecpap-95-03, University of Toronto, Department of Economics.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
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