Nash rationalizability of collective choice over lotteries

Thomas Demuynck and Luc Lauwers

Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium from Ghent University, Faculty of Economics and Business Administration

Abstract: To test the joint hypothesis that players in a noncooperative game (allowing mixed strategies) maximize expected utilities and select a Nash equilibrium, it suffices to study the reaction of the revealed collective choice upon changes in the space of strategies available to the players. The joint hypothesis is supported if the revealed choices satisfy an extended version of Richter’s congruence axiom together with a contraction-expansion axiom that models the noncooperative behavior. In addition, we provide sufficient and necessary conditions for a binary relation to have an independent ordering extension, and for individual choices over lotteries to be rationalizable.

Keywords: independence condition; binary extensions; rationalizability; Nash equilibrium in mixed strategies (search for similar items in EconPapers)
JEL-codes: C72 C92 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2005-04
New Economics Papers: this item is included in nep-dcm and nep-exp
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Persistent link: https://EconPapers.repec.org/RePEc:rug:rugwps:05/301

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