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Context dependent games as quantifiers and selection functions

Author

Listed:
  • Hedges, Jules
  • Oliva, Paulo
  • Winschel, Evguenia
  • Winschel, Viktor
  • Zahn, Philipp

Abstract

We use quantifiers and selection functions to represent simultaneous move games. Quantifiers and selection functions are examples of higher-order functions. A higher order function is a function whose domain is itself a set of functions. Thus, quantifiers and selection func- tions allow players to form goals not only about outcomes but about the whole (or parts) of the game play. They encompass standard pref- erences and utility functions as special cases, but also extend to non-maximizing behavior and context-dependent motives. We adapt the Nash equilibrium concept to our new representation and also introduce a refinement to capture the essential features of context-dependent motives. As an example, we discuss fixpoint operations as context dependent goals of coordination and differentiation in simultaneous game variants of Keyne's beauty contest and the minority game.

Suggested Citation

  • Hedges, Jules & Oliva, Paulo & Winschel, Evguenia & Winschel, Viktor & Zahn, Philipp, 2014. "Context dependent games as quantifiers and selection functions," Working Papers 14-13, University of Mannheim, Department of Economics.
    • Handle: RePEc:mnh:wpaper:36178
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    File URL: https://madoc.bib.uni-mannheim.de/36178/1/Hedges%2C_Oliva%2C_Winschel%2C_Winschel%2C_Zahn_14-13.pdf
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    References listed on IDEAS

    as
    1. Willemien Kets, 2007. "The minority game: An economics perspective," Papers 0706.4432, arXiv.org.
    2. Hedges, Jules & Oliva, Paulo & Winschel, Evguenia & Winschel, Viktor & Zahn, Philipp, 2014. "A new perspective on classical choice problems using selection functions," Working Papers 14-14, University of Mannheim, Department of Economics.
    3. Arthur, W Brian, 1994. "Inductive Reasoning and Bounded Rationality," American Economic Review, American Economic Association, vol. 84(2), pages 406-411, May.
    4. Sargent, Thomas J., 1993. "Bounded Rationality in Macroeconomics: The Arne Ryde Memorial Lectures," OUP Catalogue, Oxford University Press, number 9780198288695.
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    1. Hedges, Jules & Oliva, Paulo & Winschel, Evguenia & Winschel, Viktor & Zahn, Philipp, 2014. "A new perspective on classical choice problems using selection functions," Working Papers 14-14, University of Mannheim, Department of Economics.

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    More about this item

    Keywords

    context dependent refinement of Nash equilibrium ; higher order functions ; quantifiers ; selection functions ; beauty contest ; minority game ; endogenous economist;
    All these keywords.

    JEL classification:

    • C0 - Mathematical and Quantitative Methods - - General
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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