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Nash Equilibrium When Players Account for the Complexity of their Forecasts

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Author Info
Eliaz, K.

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Abstract

Nash equilibrium is often interpreted as a steady state in which each player holds the correct expectations about the other players` behavior and acts rationally. This paper investigates the robustness of this interpretation when players` preferences are affected by their forecasts about the other players. In particular, I analyze the case of lexicographic preferences in which the simplicity of forecasts is secondary to material payoffs.

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Publisher Info
Paper provided by Tel Aviv in its series Papers with number 2001-6.

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Length: 34 pages
Date of creation: 2001
Date of revision:
Handle: RePEc:fth:teavfo:2001-6

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Postal: Israel TEL-AVIV UNIVERSITY, THE FOERDER INSTITUTE FOR ECONOMIC RESEARCH, RAMAT AVIV 69 978 TEL AVIV ISRAEL.
Phone: 972-3-640-9255
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Web page: http://econ.tau.ac.il/research/foerder.asp
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Related research
Keywords: GAMES ; FORECASTS ; EXPECTATIONS;

Other versions of this item:

Find related papers by JEL classification:
O21 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
O22 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis

Cited by:
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  1. Ran Spiegler, 2001. "Testing Threats in Repeated Games," Economics Working Papers 0009, Institute for Advanced Study, School of Social Science. [Downloadable!]
  2. Philippe Jehiel, 2005. "Analogy-Based Expectation Equilibrium," Levine's Bibliography 784828000000000106, UCLA Department of Economics. [Downloadable!]
    Other versions:
  3. Azrieli, Yaron, 2007. "Thinking categorically about others: A conjectural equilibrium approach," MPRA Paper 3843, University Library of Munich, Germany, revised 06 Sep 2007. [Downloadable!]
  4. Friederike Mengel, 2007. "Learning Across Games," Working Papers. Serie AD 2007-05, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
  5. Ran Spiegler, 2003. "Simplicity of Beliefs and Delay Tactics in a Concession Game," Levine's Bibliography 506439000000000208, UCLA Department of Economics. [Downloadable!]
Statistics
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This page was last updated on 2009-11-20.


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