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The E-Mail Game Revisited €” Modeling Rough Inductive Reasoning

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Author Info
UWE DULLECK () (School of Economics and Finance, Queensland University of Technology, GPO Box 2434, Brisbane QLD 4001, Australia)

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Abstract

I study the robustness of Rubinstein's (1989) E-Mail Game results by varying the information that players can utilize. The article follows one of Morris' (2002) reactions to the E-Mail game "that one should try to come up with a model of boundedly rational behavior that delivers predictions that are insensitive to whether there is common knowledge or a large number of levels of knowledge". Players in my model are presumed to use 'rough inductive reasoning' because they cannot utilize exact information.The information structure in the E-Mail game is generalized and the conditions are characterized under which Rubinstein's results hold. I find that rough inductive reasoning generates a payoff dominant equilibrium where the expected payoffs change continuously (instead of discretely) in the probability of "faulty" communication.

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Publisher Info
Article provided by World Scientific Publishing Co. Pte. Ltd. in its journal International Game Theory Review.

Volume (Year): 09 (2007)
Issue (Month): 02 ()
Pages: 323-339
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Handle: RePEc:wsi:igtrxx:v:09:y:2007:i:02:p:323-339

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Related research
Keywords: Inductive reasoning; JEL-Classification: C72;

Find related papers by JEL classification:
B4 - Schools of Economic Thought and Methodology - - Economic Methodology
C0 - Mathematical and Quantitative Methods - - General
C6 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming
C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
D5 - Microeconomics - - General Equilibrium and Disequilibrium
D7 - Microeconomics - - Analysis of Collective Decision-Making
M2 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics

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