Bounded interpersonal inferences and decision making

Nobu-Yuki Suzuki () and Mamoru Kaneko ()
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Nobu-Yuki Suzuki: Department of Mathematics, Faculty of Science, Shizuoka University, Ohya, Shizuoka 422-8529, JAPAN

Economic Theory, 2002, vol. 19, issue 1, 63-103

Abstract: Individual decision making is based on predictions about other players' choices as well as on valuations of reactions to predictions. In this sense, a player has a prediction-decision criterion for decision making. We develop a theory of prediction-decision criteria, which enables us to capture new phenomena on individual decision making in games. The decision making situation is described in the epistemic logic GL$_{EF}$ of shallow depths. There, each player considers his and other players' decision making down to some shallow depths. It is a point of our theory to investigate inferential complexities of interpersonal introspections. In particular, we can discuss a minimal epistemic inferential structure for prediction-decision making. We will find parallel structures in decision making and prediction making, which is called an inner parallelism. The climax of the paper is the consideration of inner parallelisms of prediction-decision making.

Keywords: Shallow epistemic depth; Prediction-decision criterion; Epistemic structure; Complexity of interpersonal introspection; Inner parallelism. (search for similar items in EconPapers)
JEL-codes: C60 C69 D89 (search for similar items in EconPapers)
Date: 2001-09-12
Note: Received: August 31, 2000; revised version: April 9, 2001
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Citations: View citations in EconPapers (1)

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