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Uncertainty aversion and equilibrium existence in games with incomplete information

Listed author(s):
  • Azrieli, Yaron
  • Teper, Roee

We consider games with incomplete information à la Harsanyi, where the payoff of a player depends on an unknown state of nature as well as on the profile of chosen actions. As opposed to the standard model, playersʼ preferences over state-contingent utility vectors are represented by arbitrary functionals. The definitions of Nash and Bayes equilibria naturally extend to this generalized setting. We characterize equilibrium existence in terms of the preferences of the participating players. It turns out that, given continuity and monotonicity of the preferences, equilibrium exists in every game if and only if all players are averse to uncertainty (i.e., all the functionals are quasi-concave).

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File URL: http://www.sciencedirect.com/science/article/pii/S089982561100056X
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Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 73 (2011)
Issue (Month): 2 ()
Pages: 310-317

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Handle: RePEc:eee:gamebe:v:73:y:2011:i:2:p:310-317
DOI: 10.1016/j.geb.2011.03.005
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622836

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