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Generalized Nash equilibrium with stable belief hierarchies in static games with unawareness

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  • Yasuo Sasaki

    (Japan Advanced Institute of Science and Technology)

Abstract

In game theory, recently models and solution concepts of games with unawareness have been developed. Focusing on static games with unawareness, this paper discusses generalized Nash equilibrium, an existing equilibrium concept. Some generalized Nash equilibria can be unstable in the sense that, once an equilibrium is played, some agent’s belief is falsified at some level of someone’s perception hierarchy. Based on the observation, we characterize a particular class of generalized Nash equilibrium that expresses stable belief hierarchies so that it can avoid such a problem. This class of equilibrium can be motivated as a stable convention of the game. We also study how unawareness can affect the agents’ behaviors in a stationary state.

Suggested Citation

  • Yasuo Sasaki, 2017. "Generalized Nash equilibrium with stable belief hierarchies in static games with unawareness," Annals of Operations Research, Springer, vol. 256(2), pages 271-284, September.
    • Handle: RePEc:spr:annopr:v:256:y:2017:i:2:d:10.1007_s10479-016-2266-5
    DOI: 10.1007/s10479-016-2266-5
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    Cited by:

    1. Schipper, Burkhard C., 2021. "Discovery and equilibrium in games with unawareness," Journal of Economic Theory, Elsevier, vol. 198(C).
    2. Sasaki, Yasuo, 2022. "Unawareness of decision criteria in multicriteria games," Mathematical Social Sciences, Elsevier, vol. 119(C), pages 31-40.
    3. Katarina Kostelić, 2023. "Implications of (un)awareness for decision-making in strategic interaction: another take on the Prisoner’s dilemma," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 50(2), pages 251-268, June.
    4. Andrew J. Keith & Darryl K. Ahner, 2021. "A survey of decision making and optimization under uncertainty," Annals of Operations Research, Springer, vol. 300(2), pages 319-353, May.
    5. Norimasa Kobayashi & Yasuo Sasaki, 2024. "Rationalizable self-confirming equilibrium in static games with unawareness," International Journal of Game Theory, Springer;Game Theory Society, vol. 53(3), pages 765-790, September.

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