An Approach to Bounded Rationality

Eli Ben-Sasson, Adam Tauman Kalai and Ehud Kalai

No 1439, Discussion Papers from Northwestern University, Center for Mathematical Studies in Economics and Management Science

Abstract: A central question in game theory and artificial intelligence is how a rational agent should behave in a complex environment, given that it cannot perform unbounded computations. We study strategic aspects of this question by formulating a simple model of a game with additional costs (computational or otherwise) for each strategy. First we connect this to zero-sum games, proving a counter-intuitive generalization of the classic min-max theorem to zero-sum games with the addition of strategy costs. We then show that potential games with strategy costs remain potential games. Both zero-sum and potential games with strategy costs maintain a very appealing property: simple learning dynamics converge to equilibrium.

Keywords: bounded rationality; zero sum games; potential games; strategic complexity. (search for similar items in EconPapers)
Date: 2006-11
New Economics Papers: this item is included in nep-cbe, nep-evo and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.kellogg.northwestern.edu/research/math/papers/1439.pdf main text (application/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:nwu:cmsems:1439

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Discussion Papers from Northwestern University, Center for Mathematical Studies in Economics and Management Science Center for Mathematical Studies in Economics and Management Science, Northwestern University, 580 Jacobs Center, 2001 Sheridan Road, Evanston, IL 60208-2014. Contact information at EDIRC.
Bibliographic data for series maintained by Fran Walker ( this e-mail address is bad, please contact ).