Simplicity of beliefs and delay tactics in a concession game
AbstractI explore the idea of simplicity as a belief-selection criterion in games. A pair of strategies in finite-automata representation (s(1), s(2)) is a Simple Nash Equilibrium (SINE) if: (1) s(j) is a best-reply to s(i); (2) every automaton for player j, which generates the same path as s(j) (given s(i)), has at least as many states as s(j). I apply SINE to a bilateral concession game and show that it captures an aspect of bargaining behavior: players employ delay tactics in order to justify their concessions. Delay tactics are mutually reinforcing, and this may prevent players from reaching an interior agreement. (C) 2003 Elsevier Inc. All rights reserved.
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Date of creation: Apr 2004
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Publication status: Published in GAME ECON BEHAV (2004-04) v.47, p.200-220
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Other versions of this item:
- Spiegler, Ran, 2004. "Simplicity of beliefs and delay tactics in a concession game," Games and Economic Behavior, Elsevier, vol. 47(1), pages 200-220, April.
- Ran Spiegler, 2003. "Simplicity of Beliefs and Delay Tactics in a Concession Game," Levine's Working Paper Archive 506439000000000208, David K. Levine.
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