Zhao, Guo (2015): Dynamic Games under Bounded Rationality.
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Abstract
I propose a dynamic game model that is consistent with the paradigm of bounded rationality. Its main advantages over the traditional approach based on perfect rationality are that: (1) the strategy space is a chain-complete partially ordered set; (2) the response function is certain order-preserving map on strategy space; (3) the evolution of economic system can be described by the Dynamical System defined by the response function under iteration; (4) the existence of pure-strategy Nash equilibria can be guaranteed by fixed point theorems for ordered structures, rather than topological structures. This preference-response framework liberates economics from the utility concept, and constitutes a marriage of normal-form and extensive-form games.
Item Type: | MPRA Paper |
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Original Title: | Dynamic Games under Bounded Rationality |
English Title: | Dynamic Games under Bounded Rationality |
Language: | English |
Keywords: | Dynamic Games,Bounded Rationality,Dynamical System, fixed point theorems,chain-complete partially ordered set,Coase theorem,impossibility theorem, Keynesian beauty contest,Bertrand Paradox, backward induction paradox |
Subjects: | C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory D - Microeconomics > D5 - General Equilibrium and Disequilibrium D - Microeconomics > D7 - Analysis of Collective Decision-Making |
Item ID: | 62688 |
Depositing User: | Guo Zhao |
Date Deposited: | 09 Mar 2015 08:52 |
Last Modified: | 28 Sep 2019 13:11 |
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URI: | https://mpra.ub.uni-muenchen.de/id/eprint/62688 |
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