The role of fairness motives and spatial considerations in explaining departures from Nash equilibrium: stationary and evolutionary lessons from 2x2 games
Substantial evidence has accumulated in recent empirical works on the limited ability of the Nash equilibrium to rationalize observed behavior in many classes of games played by experimental subjects. This realization has led to several attempts aimed at finding tractable equilibrium concepts which perform better empirically, often by introducing a reference point to which players compare the available payoff allocations, as in impulse balance equilibrium and in the inequity aversion model. The first part of this paper is concerned with reviewing the recent reference point literature and advancing a new, empirically sound, hybrid concept. In the second part, evolutionary game theoretic models are employed to investigate the role played by fairness motives as well as spatial structure in explaining the evolution of cooperative behavior.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
9252.
Find related papers by JEL classification: B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Institutional; Evolutionary A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values D64 - Microeconomics - - Welfare Economics - - - Altruism C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
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