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An indistinguishability result on rationalizability under general preferences

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Author Info

  • Yi-Chun Chen

    ()

  • Xiao Luo

    ()

Abstract

In this paper, we show that, in the class of games where each player’s strategy space is compact Hausdorff and each player’s payoff function is continuous and “concave-like,” rationalizability in a variety of general preference models yields the unique set of outcomes of iterated strict dominance. The result implies that rationalizable strategic behavior in these preference models is observationally indistinguishable from that in the subjective expected utility model, in this class of games. Our indistinguishability result can be applied not only to mixed extensions of finite games, but also to other important applications in economics, for example, the Cournot–oligopoly model. Copyright Springer-Verlag 2012

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File URL: http://hdl.handle.net/10.1007/s00199-010-0596-0
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Bibliographic Info

Article provided by Springer in its journal Economic Theory.

Volume (Year): 51 (2012)
Issue (Month): 1 (September)
Pages: 1-12

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Handle: RePEc:spr:joecth:v:51:y:2012:i:1:p:1-12

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Related research

Keywords: Rationalizability; Iterated dominance; General preferences; C70; D82;

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References

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  1. Martin Dufwenberg & Mark Stegeman, 2002. "Existence and Uniqueness of Maximal Reductions Under Iterated Strict Dominance," Econometrica, Econometric Society, vol. 70(5), pages 2007-2023, September.
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  12. Machina,Mark & Schmeidler,David, 1991. "A more robust definition of subjective probability," Discussion Paper Serie A 365, University of Bonn, Germany.
  13. Pearce, David G, 1984. "Rationalizable Strategic Behavior and the Problem of Perfection," Econometrica, Econometric Society, vol. 52(4), pages 1029-50, July.
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Citations

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Cited by:
  1. Haomiao Yu, 2014. "Rationalizability in large games," Economic Theory, Springer, vol. 55(2), pages 457-479, February.
  2. Minqiang Li, 2014. "On Aumann and Serrano’s economic index of risk," Economic Theory, Springer, vol. 55(2), pages 415-437, February.

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