Probabilistic choice in games: properties of Rosenthal's t-solutions

Mark Voorneveld

No 542, SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics

Abstract: In t-solutions, quantal response equilibria based on the linear probability model as introduced in R.W. Rosenthal (1989, Int. J. Game Theory 18, 273-292), choice probabilities are related to the determination of leveling taxes. The set of t-solutions coincides with the set of Nash equilibria of a game with quadratic control costs. Increasing the rationality of the players allows them to successively eliminate higher levels of strictly dominated actions. Moreover, there exists a path of t-solutions linking uniform randomization to Nash equilibrium.

Keywords: quantal response equilibrium; t-solutions; linear probability model (search for similar items in EconPapers)
JEL-codes: C72 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2003-10-28, Revised 2003-12-20
New Economics Papers: this item is included in nep-mfd
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Related works:
Journal Article: Probabilistic Choice in Games: Properties of Rosenthal’s t-Solutions (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:hastef:0542

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