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 |
---|---|
1. Verfasser: | |
Format: | IHS Series NonPeerReviewed |
Sprache: | Englisch |
Veröffentlicht: |
Institut für Höhere Studien
1994
|
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.; |
---|