Incentive constraints in games with bounded memory

Daniel Monte ()

International Journal of Game Theory, 2014, vol. 43, issue 1, 137-143

Abstract: In this paper I analyze a repeated coordination game between a bounded memory player and a fully rational player. A bounded memory player is a player who is subject to imperfect recall, but, conditional on this constraint, acts optimally every point in time given her beliefs over the actual history of the game. I show that the results contrast with the ones in the finite automata literature. In particular, a result denoted the “tyranny of the weak” in Gilboa and Samet (Games Econ Behav 1: 213–221, 1989 ) is no longer present here. Copyright Springer-Verlag Berlin Heidelberg 2014

Keywords: Bounded memory; Commitment; Automaton; C72; D82; D83 (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1007/s00182-013-0376-8

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