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Nash rationalizability of collective choice over lotteries






To test the joint hypothesis that players in a noncooperative game (allowing mixed strategies) maximize expected utilities and select a Nash equilibrium, it suffices to study the reaction of the revealed collective choice upon changes in the space of strategies available to the players. The joint hypothesis is supported if the revealed choices satisfy an extended version of Richter’s congruence axiom together with a contraction-expansion axiom that models the noncooperative behavior. In addition, we provide sufficient and necessary conditions for a binary relation to have an independent ordering extension, and for individual choices over lotteries to be rationalizable.

Suggested Citation

  • T. Demuynck & L. Lauwers, 2005. "Nash rationalizability of collective choice over lotteries," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 05/301, Ghent University, Faculty of Economics and Business Administration.
  • Handle: RePEc:rug:rugwps:05/301

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    References listed on IDEAS

    1. Ray, Indrajit & Zhou, Lin, 2001. "Game Theory via Revealed Preferences," Games and Economic Behavior, Elsevier, vol. 37(2), pages 415-424, November.
    2. Conlisk, John, 1989. "Three Variants on the Allais Example," American Economic Review, American Economic Association, vol. 79(3), pages 392-407, June.
    3. Amartya K. Sen, 1971. "Choice Functions and Revealed Preference," Review of Economic Studies, Oxford University Press, vol. 38(3), pages 307-317.
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    More about this item


    independence condition; binary extensions; rationalizability; Nash equilibrium in mixed strategies;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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