Cognitive Uncertainty in Games - A Note on Limited Information Processing and Backward Induction

Thorsten Clausing
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Thorsten Clausing: University of Magdeburg

Game Theory and Information from EconWPA

Abstract: A notion of cognitive uncertainty is introduced as an agent's uncertainty about the validity of the results of his own information processing. In order to analyze this notion, a formal model of the agent's information processing is presented. It is shown how cognitive uncertainty may prevent a group of well informed rational agents from playing backward induction in a game of perfect information, whereas they would play backward induction without such uncertainty.

Keywords: uncertainty; information processing; backward induction (search for similar items in EconPapers)
JEL-codes: C7 D8 (search for similar items in EconPapers)
Date: 2000-04-27
Note: Type of Document - pdf
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpga:0004001

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