Nash equilibrium under knightian uncertainty: breaking down backward induction (extensively revised version)

Detalhes bibliográficos
Autor(a) principal: Dow, James
Data de Publicação: 1993
Outros Autores: Werlang, Sérgio Ribeiro da Costa
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Institucional do FGV (FGV Repositório Digital)
Texto Completo: http://hdl.handle.net/10438/935
Resumo: We define Nash equilibrium for two-person normal form games in the presence of uncertainty, in the sense of Knight(1921). We use the fonna1iution of uncertainty due to Schmeidler and Gilboa. We show tbat there exist Nash equilibria for any degree of uncertainty, as measured by the uncertainty aversion (Dow anel Wer1ang(l992a». We show by example tbat prudent behaviour (maxmin) can be obtained as an outcome even when it is not rationaliuble in the usual sense. Next, we break down backward industion in the twice repeated prisoner's dilemma. We link these results with those on cooperation in the finitely repeated prisoner's dilemma obtained by Kreps-Milgrom-Roberts-Wdson(1982), and withthe 1iterature on epistemological conditions underlying Nash equilibrium. The knowledge notion implicit in this mode1 of equilibrium does not display logical omniscience.
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spelling Dow, JamesWerlang, Sérgio Ribeiro da CostaEscolas::EPGEFGV2008-05-13T15:41:57Z2008-05-13T15:41:57Z1993-040104-8910http://hdl.handle.net/10438/935We define Nash equilibrium for two-person normal form games in the presence of uncertainty, in the sense of Knight(1921). We use the fonna1iution of uncertainty due to Schmeidler and Gilboa. We show tbat there exist Nash equilibria for any degree of uncertainty, as measured by the uncertainty aversion (Dow anel Wer1ang(l992a». We show by example tbat prudent behaviour (maxmin) can be obtained as an outcome even when it is not rationaliuble in the usual sense. Next, we break down backward industion in the twice repeated prisoner's dilemma. We link these results with those on cooperation in the finitely repeated prisoner's dilemma obtained by Kreps-Milgrom-Roberts-Wdson(1982), and withthe 1iterature on epistemological conditions underlying Nash equilibrium. The knowledge notion implicit in this mode1 of equilibrium does not display logical omniscience.engEscola de Pós-Graduação em Economia da FGVEnsaios Econômicos;213Todo cuidado foi dispensado para respeitar os direitos autorais deste trabalho. Entretanto, caso esta obra aqui depositada seja protegida por direitos autorais externos a esta instituição, contamos com a compreensão do autor e solicitamos que o mesmo faça contato através do Fale Conosco para que possamos tomar as providências cabíveisinfo:eu-repo/semantics/openAccessNash equilibrium under knightian uncertainty: breaking down backward induction (extensively revised version)info:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleEconomiaEconomia matemáticaEconomiareponame:Repositório Institucional do FGV (FGV Repositório Digital)instname:Fundação Getulio Vargas (FGV)instacron:FGVORIGINAL213_000058957.pdf213_000058957.pdfapplication/pdf1259112https://repositorio.fgv.br/bitstreams/5c13e626-9950-44e6-a397-340856564120/downloadf184097ed7d21bd4b6f6e0fda4e905fbMD51TEXT213_000058957.pdf.txt213_000058957.pdf.txtExtracted texttext/plain62632https://repositorio.fgv.br/bitstreams/6941cdaf-ccf9-4924-9363-001c56cf7b75/downloadfddff5ef96d1189e39145538f5dfcf60MD56THUMBNAIL213_000058957.pdf.jpg213_000058957.pdf.jpgGenerated Thumbnailimage/jpeg2207https://repositorio.fgv.br/bitstreams/4e165e66-fba8-464e-8b7b-5372046dbc5b/downloadfc2a674f5e8d8689f554b0d22a507456MD5710438/9352023-11-08 23:41:24.966open.accessoai:repositorio.fgv.br:10438/935https://repositorio.fgv.brRepositório InstitucionalPRIhttp://bibliotecadigital.fgv.br/dspace-oai/requestopendoar:39742023-11-08T23:41:24Repositório Institucional do FGV (FGV Repositório Digital) - Fundação Getulio Vargas (FGV)false
dc.title.eng.fl_str_mv Nash equilibrium under knightian uncertainty: breaking down backward induction (extensively revised version)
title Nash equilibrium under knightian uncertainty: breaking down backward induction (extensively revised version)
spellingShingle Nash equilibrium under knightian uncertainty: breaking down backward induction (extensively revised version)
Dow, James
Economia
Economia matemática
Economia
title_short Nash equilibrium under knightian uncertainty: breaking down backward induction (extensively revised version)
title_full Nash equilibrium under knightian uncertainty: breaking down backward induction (extensively revised version)
title_fullStr Nash equilibrium under knightian uncertainty: breaking down backward induction (extensively revised version)
title_full_unstemmed Nash equilibrium under knightian uncertainty: breaking down backward induction (extensively revised version)
title_sort Nash equilibrium under knightian uncertainty: breaking down backward induction (extensively revised version)
author Dow, James
author_facet Dow, James
Werlang, Sérgio Ribeiro da Costa
author_role author
author2 Werlang, Sérgio Ribeiro da Costa
author2_role author
dc.contributor.unidadefgv.por.fl_str_mv Escolas::EPGE
dc.contributor.affiliation.none.fl_str_mv FGV
dc.contributor.author.fl_str_mv Dow, James
Werlang, Sérgio Ribeiro da Costa
dc.subject.area.por.fl_str_mv Economia
topic Economia
Economia matemática
Economia
dc.subject.bibliodata.por.fl_str_mv Economia matemática
Economia
description We define Nash equilibrium for two-person normal form games in the presence of uncertainty, in the sense of Knight(1921). We use the fonna1iution of uncertainty due to Schmeidler and Gilboa. We show tbat there exist Nash equilibria for any degree of uncertainty, as measured by the uncertainty aversion (Dow anel Wer1ang(l992a». We show by example tbat prudent behaviour (maxmin) can be obtained as an outcome even when it is not rationaliuble in the usual sense. Next, we break down backward industion in the twice repeated prisoner's dilemma. We link these results with those on cooperation in the finitely repeated prisoner's dilemma obtained by Kreps-Milgrom-Roberts-Wdson(1982), and withthe 1iterature on epistemological conditions underlying Nash equilibrium. The knowledge notion implicit in this mode1 of equilibrium does not display logical omniscience.
publishDate 1993
dc.date.issued.fl_str_mv 1993-04
dc.date.accessioned.fl_str_mv 2008-05-13T15:41:57Z
dc.date.available.fl_str_mv 2008-05-13T15:41:57Z
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dc.relation.ispartofseries.por.fl_str_mv Ensaios Econômicos;213
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