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AI Plays? {\delta}-Rationality Games with Nash Equilibrium as Special Case

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  • Fang-Fang Tang
  • Yongsheng Xu

Abstract

A distortion function, which captures the payoff gap between a player's actual payoff and her true payoff, is introduced and used to analyze games. In our proposed framework, we argue that players' actual payoff functions should be used to explain and predict their behaviors, while their true payoff functions should be used to conduct welfare analysis of the outcomes.

Suggested Citation

  • Fang-Fang Tang & Yongsheng Xu, 2025. "AI Plays? {\delta}-Rationality Games with Nash Equilibrium as Special Case," Papers 2506.16467, arXiv.org.
    • Handle: RePEc:arx:papers:2506.16467
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    References listed on IDEAS

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    3. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 817-868.
    4. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
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