Dynamic Exploitation of Myopic Best Response

Burkhard Schipper

Dynamic Games and Applications, 2019, vol. 9, issue 4, No 13, 1143-1167

Abstract: Abstract How can a rational player manipulate a myopic best response player in a repeated two-player game? We show that in games with strategic substitutes or strategic complements the optimal control strategy is monotone in the initial action of the opponent, in time periods, and in the discount rate. As an interesting example outside this class of games we present a repeated “textbook-like” Cournot duopoly with nonnegative prices and show that the optimal control strategy involves a cycle.

Keywords: Strategic teaching; Learning; Adaptive heuristics; Dynamic optimization; Strategic substitutes; Strategic complements; Myopic players (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s13235-018-0289-z

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