Probabilistic Choice Models

Jonathan R. Gair, Sriya Iyer and Chander Velu

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: We examine a number of probabilistic choice models in which people might form their beliefs to play their strategies in a game theoretic setting in order to propose alternative equilibrium concepts to the Nash equilibrium. In particular, we evaluate the Blavatskyy model, Returns Based Beliefs (RBB) model, Quantal Response Equilibrium (QRE) model, Boundedly Rational Nash Equilibrium (BRNE) model and the Utility Proportional Beliefs (UPB) model. We outline the foundational axioms for these models and fully explicate them in terms of probabilistic actions, probabilistic beliefs and their epistemic characterizations. We test the model predictions using empirical data and show which models perform better under which conditions. We also extend the Blavatskyy model which was developed to consider games with two actions to cases where there are three or more actions. We provide a nuanced understanding of how different types of probabilistic choice models might predict better than others.

Keywords: Subjective Probabilities; Decision Making; Cooperation (search for similar items in EconPapers)
Date: 2021-01-04
New Economics Papers: this item is included in nep-dcm, nep-gth and nep-upt
Note: si105
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.econ.cam.ac.uk/sites/default/files/pub ... pe-pdfs/cwpe2102.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:2102

Access Statistics for this paper

More papers in Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge
Bibliographic data for series maintained by Jake Dyer ().