Bluffing as a Mixed Strategy
In von Neumann and Morgenstern's sample model of poker, equilibrium has the first player bet with high and low hands, and check with intermediate hands.� The second player then calls if his hand is sufficiently high.� Betting by the low hands is interpreted as bluffing, and is a pure strategy.� Here we show that this equilibrium is nongeneric, in the sense that it ceases to exist if the first player is allowed to choose among many possible bets, rather than just one.� Moreover, Newman's solution for this case - which also has pure-strategy bluffing - is shown not to be a sequential equilibrium.� However, a modified solution� - where low hands bluff using mixed strategies - is a sequential equilbrium.
|Date of creation:||01 Jan 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.economics.ox.ac.uk/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:oxf:wpaper:590. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Caroline Wise)
If references are entirely missing, you can add them using this form.