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Lying for Strategic Advantage: Rational and Boundedly Rational Misrepresentation of Intentions

Listed author(s):
  • Vincent P. Crawford

Starting from an example of the Allies' decision to feint at Calais and attack Normandy on D-Day, this paper models misrepresentation of intentions to competitors or enemies. Allowing for the possibility of bounded strategic rationality and rational players' responses to it yields a sensible account of lying via costless, noiseless messages. In some leading cases, the model has generically unique pure-strategy sequential equilibria, in which rational players exploit boundedly rational players, but are not themselves fooled. In others, the model has generically essentially unique mixed-strategy sequential equilibria, in which rational players' strategies protect all players from exploitation.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/000282803321455197
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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 93 (2003)
Issue (Month): 1 (March)
Pages: 133-149

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Handle: RePEc:aea:aecrev:v:93:y:2003:i:1:p:133-149
Note: DOI: 10.1257/000282803321455197
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  1. Rabin Matthew, 1994. "A Model of Pre-game Communication," Journal of Economic Theory, Elsevier, vol. 63(2), pages 370-391, August.
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  8. Costa-Gomes, Miguel & Crawford, Vincent P & Broseta, Bruno, 2001. "Cognition and Behavior in Normal-Form Games: An Experimental Study," Econometrica, Econometric Society, vol. 69(5), pages 1193-1235, September.
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  17. Robert Aumann & Adam Brandenburger, 2014. "Epistemic Conditions for Nash Equilibrium," World Scientific Book Chapters,in: The Language of Game Theory Putting Epistemics into the Mathematics of Games, chapter 5, pages 113-136 World Scientific Publishing Co. Pte. Ltd..
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  19. repec:hoo:wpaper:e-89-7 is not listed on IDEAS
  20. Blume, Andreas, et al, 1998. "Experimental Evidence on the Evolution of Meaning of Messages in Sender-Receiver Games," American Economic Review, American Economic Association, vol. 88(5), pages 1323-1340, December.
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  23. Roland Benabou & Guy Laroque, 1992. "Using Privileged Information to Manipulate Markets: Insiders, Gurus, and Credibility," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 921-958.
  24. Loury, G., 1993. "Self-Censorship in Public Discourse: A Theory of 'Political Correctness' and Related Phenomena," Papers 23, Boston University - Department of Economics.
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