Epistemological Bases for Nash and Rationalizability Theories of Prediction/Decision-Making in Games

Tai-Wei Hu () and Mamoru Kaneko ()
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Tai-Wei Hu: Department of Economics, University of Bristol, UK
Mamoru Kaneko: Waseda University, Tokyo, and University of Tsukuba, Tsukuba, Japan

No 2603, Working Papers from Waseda University, Faculty of Political Science and Economics

Abstract: We explore the conceptual bases of the Nash (noncooperative) theory. To emphasize the conceptual issues, we compare it to the rationalizability theory. Both theories target individual ex ante prediction/decision making in a game. We pinpoint their difference in the treatment of an inside player’s prediction-making, with respect to the quantifiers “for all” and “for some”, about the other’s prediction/decision. We argue that the Nash theory follows the fundamental postulate that each player respects the other as an independent decision-maker, and that this independence is captured in the corresponding prediction/decision criterion. The rationalizability theory is based on a different conceptual base; the quantifier “for some” is highly speculative. We will discuss other conceptual bases of the Nash theory from various points of view, which suggest further developments along the line of the Nash theory.

Keywords: Nash equilibrium; Nash solution; Subsolution; Rationalizable Strategy; Prediction/decision Making; Theory of Mind (search for similar items in EconPapers)
Pages: 22 pages
Date: 2026-04
New Economics Papers: this item is included in nep-hpe
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