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The Cutting Power of Preparation

Author

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  • Tercieux, O.R.C.

    (Tilburg University, Center For Economic Research)

  • Voorneveld, M.

    (Tilburg University, Center For Economic Research)

Abstract

In a strategic game, a curb set [Basu and Weibull, Econ.Letters 36 (1991) 141-146] is a product set of pure strategies containing all best responses to every possible belief restricted to this set.Prep sets [Voorneveld, Games Econ. Behav. 48 (2004) 403-414] relax this condition by only requiring the presence of at least one best response to such a belief.The purpose of this paper is to provide sufficient conditions under which minimal prep sets give sharp predictions.These conditions are satisfied in many economically relevant classes of games, including supermodular games, potential games, and congestion games with player-specific payoffs.In these classes, minimal curb sets generically have a large cutting power as well, although it is shown that there are relevant subclasses of coordination games and congestion games where minimal curb sets have no cutting power at all and simply consist of the entire strategy space.

Suggested Citation

  • Tercieux, O.R.C. & Voorneveld, M., 2005. "The Cutting Power of Preparation," Discussion Paper 2005-94, Tilburg University, Center for Economic Research.
  • Handle: RePEc:tiu:tiucen:75173341-627f-4eb2-91f1-0f4b907a47bb
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Kets, W. & Voorneveld, M., 2007. "Congestion, Equilibrium and Learning : The Minority Game," Discussion Paper 2007-61, Tilburg University, Center for Economic Research.
    2. Willemien Kets, 2007. "The minority game: An economics perspective," Papers 0706.4432, arXiv.org.
    3. Kets, Willemien & Voorneveld, Mark, 2005. "Learning to be prepared," SSE/EFI Working Paper Series in Economics and Finance 590, Stockholm School of Economics.
    4. Christian Ewerhart, 2017. "Ordinal potentials in smooth games," ECON - Working Papers 265, Department of Economics - University of Zurich, revised Jul 2018.

    More about this item

    Keywords

    curb sets; prep sets; supermodular games; potential games; congestion games;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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