Multidimensional Reasoning in Games: Framework, Equilibrium, and Applications

Ayala Arad and Ariel Rubinstein ()

American Economic Journal: Microeconomics, 2019, vol. 11, issue 3, 285-318

Abstract: We develop a framework for analyzing multidimensional reasoning in strategic interactions, which is motivated by two experimental findings: (i) in games with a large and complex strategy space, players tend to think in terms of strategy characteristics rather than the strategies themselves; (ii) in their strategic deliberation, players consider one characteristic at a time. A multidimensional equilibrium is a vector of characteristics representing a stable mode of behavior: a player does not wish to modify any one characteristic. The concept is applied to several economic interactions, where a vector of characteristics, rather than a distribution of strategies, is identified as stable.

JEL-codes: C72 D11 D91 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/mic.20170322
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Citations: View citations in EconPapers (11)

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