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Uncertainty in the traveler’s dilemma

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  • Gilad Bavly

    (Bar-Ilan University)

Abstract

We quantify the sensitivity of the traveler’s dilemma (Basu, Am Econ Rev 84:391–395, 1994) to perturbations from common knowledge. The perturbations entail a small uncertainty about the set of admissible actions. We show that the sensitivity scale is exponential in the range of admissible actions in the traveler’s dilemma. Such rapid growth is consistent with the intuition that a wider range makes the outcome of the traveler’s dilemma less intuitive.

Suggested Citation

  • Gilad Bavly, 2017. "Uncertainty in the traveler’s dilemma," International Journal of Game Theory, Springer;Game Theory Society, vol. 46(1), pages 1-12, March.
    • Handle: RePEc:spr:jogath:v:46:y:2017:i:1:d:10.1007_s00182-015-0508-4
    DOI: 10.1007/s00182-015-0508-4
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    1. Kreps, David M. & Milgrom, Paul & Roberts, John & Wilson, Robert, 1982. "Rational cooperation in the finitely repeated prisoners' dilemma," Journal of Economic Theory, Elsevier, vol. 27(2), pages 245-252, August.
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    3. Rubinstein, Ariel, 1989. "The Electronic Mail Game: Strategic Behavior under "Almost Common Knowledge."," American Economic Review, American Economic Association, vol. 79(3), pages 385-391, June.
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    5. Gilad Bavly, 2011. "Elasticity of Games," Discussion Paper Series dp592, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
    6. Atsushi Kajii & Stephen Morris, 1997. "The Robustness of Equilibria to Incomplete Information," Econometrica, Econometric Society, vol. 65(6), pages 1283-1310, November.
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    More about this item

    Keywords

    Incomplete information; Traveler’s dilemma; Quantification; Exponential sensitivity; Perturbation; Robustness;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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