Third Down with a Yard to Go: The Dixit-Skeath Conundrum on Equilibria in Competitive Games
AbstractIn strictly competitive games, equilibrium mixed strategies are invariant to changes in the ultimate prizes. Dixit and Skeath argue that this seems counter-intuitive, and it is a challenge to the expected utility theory. We show that this invariance is robust to dropping the independence axiom, but is removed if we drop the reduction axiom. The conditions on the resulting recursive expected-utility model to get the desired outcome are analogous to conditions used in the standard model of comparative statics under risk.
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Bibliographic InfoPaper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 0222.
Date of creation: 01 Aug 2000
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- Grant, S. & Kajii, A. & Polak, B., 1999. "Third Down with a Yard to Go: The Dixit-Skeath Conundrum on Equilibria in Competitive Games," ANU Working Papers in Economics and Econometrics 1999-375, Australian National University, College of Business and Economics, School of Economics.
- Grant, S. & Kajii, A. & Polak, B., 1999. "Third Down with a Yard to Go: The Dixit-Skeath Conundrum on Equilibria in Competitive Games," Papers 375, Australian National University - 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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