What to Maximize If You Must

Aviad Heifetz, Chris Shannon () and Yossi Spiegel
Additional contact information
Aviad Heifetz: Tel Aviv University
Yossi Spiegel: Tel Aviv University

Game Theory and Information from University Library of Munich, Germany

Abstract: The assumption that decision makers choose actions to maximize their preferences is a central tenet in economics. This assumption is often justified either formally or informally by appealing to evolutionary arguments. In contrast, this paper shows that in almost every game, payoff. maximization cannot be justified by appealing to such arguments. We show that in almost every game, for almost every distortion of a player's actual payoffs, some extent of this distortion is beneficial to the player because of the resulting effect on opponents' play. Consequently, such distortions will not be driven out by any evolutionary process involving payoff.- monotonic selection dynamics, in which agents with higher actual payoffs proliferate at the expense of less successful agents. In particular, under any such selection dynamics, the population will not converge to payoff- maximizing behavior. We also show that payoff-maximizing behavior need not prevail even when preferences are imperfectly observed.

JEL-codes: C7 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2003-03-19
New Economics Papers: this item is included in nep-cbe, nep-gth, nep-ind and nep-mic
Note: 47 pages, Acrobat .pdf
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: What to maximize if you must (2007)
Working Paper: What to Maximize if You Must (2004)
Working Paper: What to Maximize if You Must (2003)
Working Paper: What to maximize if you must (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpga:0303002

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