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Games with perceptions

Elena Inarra, Annick Laruelle () and Peio Zuazo Garín
Authors registered in the RePEc Author Service: Peio Zuazo-Garin

IKERLANAK from Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I

Abstract: We assume that 2 x 2 matrix games are publicly known and that players perceive a dichotomous characteristic on their opponents which defines two types for each player. In turn, each type has beliefs concerning her opponent's types, and payoffs are assumed to be type-independent. We analyze whether the mere possibility of different types playing different strategies generates discriminatory equilibria. Given a specific information structure we find that in equilibrium a player discriminates between her types if and only if her opponent does so. We also find that for dominant solvable 2x2 games no discriminatory equilibrium exists, while under different conditions of concordance between players' beliefs discrimination appears for coordination and for competitive games. A complete characterization of the set of Bayesian equilibria is provided.

Keywords: 2x2 matrix games; incomplete information (search for similar items in EconPapers)
JEL-codes: C72 (search for similar items in EconPapers)
Date: 2012-10-23
New Economics Papers: this item is included in nep-cta, nep-gth and nep-mic
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Dpto. de Fundamentos del Análisis Económico I, Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain

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