Strategies Under Strategic Uncertainty

Helene Mass ()

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: I investigate the decision problem of a player in a game of incomplete information who faces uncertainty about the other players’ strategies. I propose a new decision criterion — the rational maximin criterion — which works in two steps. First, I assume common knowledge of rationality and eliminate all strategies which are not rationalizable. Second, I apply the maximin criterion. Using this decision criterion, one can derive predictions about outcomes and recommendations for players facing strategic uncertainty. I analyze applications to first-price auctions, contests, and bilateral trade.

Keywords: Incomplete Information; Informational Robustness; Rationalizability (search for similar items in EconPapers)
JEL-codes: D81 D82 D83 (search for similar items in EconPapers)
Pages: 50
Date: 2020-02
New Economics Papers: this item is included in nep-gth and nep-mic
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2020_157

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