 Evidential Equilibria: Heuristics and Biases in Static Games of Complete InformationAli al-Nowaihi () and Sanjit Dhami Games, 2015, vol. 6, issue 4, 1-40 Abstract: Standard equilibrium concepts in game theory find it difficult to explain the empirical evidence from a large number of static games, including the prisoners’ dilemma game, the hawk-dove game, voting games, public goods games and oligopoly games. Under uncertainty about what others will do in one-shot games, evidence suggests that people often use evidential reasoning (ER), i.e., they assign diagnostic significance to their own actions in forming beliefs about the actions of other like-minded players. This is best viewed as a heuristic or bias relative to the standard approach. We provide a formal theoretical framework that incorporates ER into static games by proposing evidential games and the relevant solution concept: evidential equilibrium (EE). We derive the relation between a Nash equilibrium and an EE. We illustrate these concepts in the context of the prisoners’ dilemma game. Keywords: evidential reasoning; game theory; cognitive bias; prisoners’ dilemma game; oligopoly games; conservative heuristics; radical heuristics; decision making (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:gam:jgames:v:6:y:2015:i:4:p:637-676:d:58900 Access Statistics for this article Games is currently edited by Ms. Susie Huang More articles in Games from MDPI |
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