Nash Equilibrium When Players Account for the Complexity of their Forecasts

Kfir Eliaz

Working Papers from Tel Aviv

Abstract: Nash equilibrium is often interpreted as a steady state in which each player holds the correct expectations about the other players` behavior and acts rationally. This paper investigates the robustness of this interpretation when players` preferences are affected by their forecasts about the other players. In particular, I analyze the case of lexicographic preferences in which the simplicity of forecasts is secondary to material payoffs.

Keywords: GAMES; FORECASTS; EXPECTATIONS (search for similar items in EconPapers)
JEL-codes: O21 O22 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2001
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Journal Article: Nash equilibrium when players account for the complexity of their forecasts (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:teavfo:2001-6

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