Probabilistic choice in games: properties of Rosenthal's t-solutions
In t-solutions, quantal response equilibria based on the linear probability model as introduced in R.W. Rosenthal (1989, Int. J. Game Theory 18, 273-292), choice probabilities are related to the determination of leveling taxes. The set of t-solutions coincides with the set of Nash equilibria of a game with quadratic control costs. Increasing the rationality of the players allows them to successively eliminate higher levels of strictly dominated actions. Moreover, there exists a path of t-solutions linking uniform randomization to Nash equilibrium.
|Date of creation:||28 Oct 2003|
|Date of revision:||31 Oct 2003|
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Levine's Working Paper Archive
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