A Note on Games under Expected Utility with Rank Dependent Probabilities
Abstract: Expected utility with rank dependent probabilities is a generalization of expected utility. If such preference representations are used for the payoffs in the mixed extension of a finite game, Nash equilibrium may fail to exist. Set-valuedsolutions, however, do exist even for those more ge...| Link(s) zu Dokument(en): | IHS Publikation |
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| Format: | IHS Series NonPeerReviewed |
| Sprache: | Englisch |
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Institut für Höhere Studien
1994
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| Zusammenfassung: | Abstract: Expected utility with rank dependent probabilities is a generalization of expected utility. If such preference representations are used for the payoffs in the mixed extension of a finite game, Nash equilibrium may fail to exist. Set-valuedsolutions, however, do exist even for those more general utility functions. Such set-valued solutions can be shown to be robust to perturbations of the expected utility hypothesis, but may have certain conceptual shortcomings. The paper thus proposes an alternative set-valued solution concept, called fixed sets under the best-reply correspondence.; |
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