The Benefits of Coarse Preferences

Joe Halpern, Yuval Heller and Eyal Winter ()

MPRA Paper from University Library of Munich, Germany

Abstract: We study the strategic advantages of coarsening one’s utility by clustering nearby payoffs together (i.e., classifying them the same way). Our solution concept, coarse-utility equilibrium (CUE) requires that (1) each player maximizes her coarse utility, given the opponent’s strategy, and (2) the classifications form best replies to one another. We characterize CUEs in various games. In particular, we show that there is a qualitative difference between CUEs in which only one of the players clusters payoffs, and those in which all players cluster their payoffs, and that the latter type induce players to treat co-players better than in Nash equilibria in the large class of games with monotone externalities.

Keywords: Categorization; language; indirect evolutionary approach; monotone externalities; strategic complements; strategic substitutes. (search for similar items in EconPapers)
JEL-codes: C73 D83 (search for similar items in EconPapers)
Date: 2022-01-25
New Economics Papers: this item is included in nep-evo, nep-gth, nep-mic, nep-ore and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://mpra.ub.uni-muenchen.de/111670/1/MPRA_paper_111670.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/111684/1/MPRA_paper_111684.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/111723/1/MPRA_paper_111723.pdf revised version (application/pdf)

Related works:
Working Paper: The Benefits of Coarse Preferences (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:111670

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