Evidential equilibria in static games
Under uncertainty about what others will do, evidence suggests that people often use evidential reasoning (ER), i.e., they assign diagnostic significance to their own actions in forming beliefs about the actions of others. ER successfully explains the evidence from many important games. We provide a formal theoretical framework for discussing ER by proposing evidential games and the relevant solution concept evidential equilibrium (EE). We derive the relation between a Nash equilibrium and an EE. We apply EE to several common games including the prisoners’ dilemma and oligopoly games.
|Date of creation:||Jul 2012|
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