Doubts and equilibria

Antonio Cabrales and José Uriarte ()

UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía

Abstract: In real life strategic interactions decision-makers are likely to entertain doubts about the degree of optimality of their play. To capture this feature of real choice-making, we present here a model based on the doubts felt by an agent about how well is playing a game. The doubts are coupled with (and mutually reinforced by) imperfect discrimination capacity, which we model here by means of similarity relations. We assume that each agent builds procedural preferences defined on the space of expected payoffsstrategy frequencies attached to his current strategy. These preferences, together with an adaptive learning process lead to doubt-based selection dynamic systems. We introduce the concepts of Mixed Strategy Doubt Equilibria, Mixed Strategy Doubt-Full Equilibria and Mixed Strategy Doubtless Equilibria and show the theoretical and the empirical relevance of these concepts

Keywords: Doubts; Bounded; rationality; Evolutionary; dynamics; Decision; theory (search for similar items in EconPapers)
JEL-codes: C72 C73 D81 (search for similar items in EconPapers)
Date: 2008-02
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-gth, nep-hpe and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Doubts and equilibria (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:cte:werepe:we080905

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