Growth of Strategy Sets, Entropy and Nonstationary Bounded Recall

Abraham Neyman Null and Daijiro Okada ()
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Abraham Neyman Null: Hebrew University
Daijiro Okada: Rutgers University

Departmental Working Papers from Rutgers University, Department of Economics

Abstract: This paper initiates the study of long term interactions where players' bounded rationality varies over time. Time dependent bounded rationality is reflected in part in the number $\psi(t)$ of distinct strategies in the first $t$-stages. We examine how the growth rate of $\psi_i(t)$ affects equilibrium outcomes of repeated games, and, as a special case, we study the repeated games with nonstationary bounded recall.

Keywords: bounded rationality; strategy set growth; strategic complexity; nonstationary bounded recall; repeated games (search for similar items in EconPapers)
JEL-codes: C72 C73 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth
Date: 2005-11-24
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Persistent link: http://EconPapers.repec.org/RePEc:rut:rutres:200514

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