The Revelation Principle of Bounded Rationality

Eduardo Zambrano

Research in Economics from Santa Fe Institute

Abstract: In the present paper I introduce the revelation principle of bounded rationality. The principle states that any behavior that a model of bounded rationality exhibits can be implemented as the choice of an agent with preferences and beliefs consistent with Savage-Bayesian rationality. The principle provides a way to unify the two main research programs on the foundations of game theory: the decision-theoretic program and the bounded rationality program. I illustrate how the principle works by providing a solution to the ``El Farol'' problem, a deterministic model of bounded rationality that exhibits stochastic equilibrium behavior. The unification shows that one need not go outside the received theory of Savage-Bayesian decision making to provide adequate foundations for equilibrium analysis.

Keywords: bounded rationality; computational economics; learning in games (search for similar items in EconPapers)
Date: 1997-06

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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: http://EconPapers.repec.org/RePEc:wop:safire:97-06-060e

Access Statistics for this paper

More papers in Research in Economics from Santa Fe Institute
Contact information at EDIRC.
Series data maintained by Thomas Krichel ().