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Reflections on Equilibrium: Ideal Rationality and Analytic Decomposition of Games

  • Siegfried Berninghaus

    (Institut WIOR, Universität Karlsruhe, Rechenzentrum, Karlsruhe, Germany)

  • Werner Güth

    (Max Planck Institute for Research, into Economic Systems, Strategic Interaction Group, Jena, Germany)

  • Hartmut Kliemt

    (Universität Duisburg-Esse, Standort Duisburg, Fach Philosophie, Duisburg, Germany)

Taking seriously the philosophical foundations of classical strategic theories of choice-making we scrutinize to what extent planning on equilibrium strategies can be justified "eductively" among rational players and how this can be utilizes to analyze games by their "game-like" sub-structures, in particular by their sub-games in the extensive and by their cells in (agent) normal form. "Material" principles of rational choice and "formal" methodological requirements of consistent theory of formation are considered and it is claimed that there can be consistent "conventions of rationality!. Which of the possible conventions will prevail and definde rationality may depend though on which of the theories of ideal rationality will be absorbed among rational agents. Once established "conventional rationality" can lead to unique solutions for strategic games.

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Article provided by Institute of SocioEconomics in its journal Homo Oeconomicus.

Volume (Year): 20 (2003)
Issue (Month): ()
Pages: 257-302

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Handle: RePEc:hom:homoec:v:20:y:2003:p:257-302
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  16. Güth, Werner & Kliemt, Hartmut, 2001. "From full to bounded rationality: The limits of unlimited rationality," SFB 373 Discussion Papers 2001,12, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
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