THE E-MAIL GAME REVISITED — MODELING ROUGH INDUCTIVE REASONING

Uwe Dulleck

International Game Theory Review (IGTR), 2007, vol. 09, issue 02, 323-339

Abstract: I study the robustness of Rubinstein's (1989) E-Mail Game results by varying the information that players can utilize. The article follows one of Morris' (2002) reactions to the E-Mail game "that one should try to come up with a model of boundedly rational behavior that delivers predictions that are insensitive to whether there is common knowledge or a large number of levels of knowledge". Players in my model are presumed to use 'rough inductive reasoning' because they cannot utilize exact information.The information structure in the E-Mail game is generalized and the conditions are characterized under which Rubinstein's results hold. I find that rough inductive reasoning generates a payoff dominant equilibrium where the expected payoffs change continuously (instead of discretely) in the probability of "faulty" communication.

Keywords: Inductive reasoning; JEL-Classification: C72 (search for similar items in EconPapers)
JEL-codes: B4 C0 C6 C7 D5 D7 M2 (search for similar items in EconPapers)
Date: 2007
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Working Paper: The e-mail game revisited - Modeling rough inductive reasoning (2002)
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DOI: 10.1142/S0219198907001424

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