Bounded Rationality in the Centipede Game

Episteme ◽  
2011 ◽  
Vol 8 (3) ◽  
pp. 262-280 ◽  
Author(s):  
Ashton T. Sperry-Taylor
Keyword(s):  
Game Theory ◽  
Nash Equilibrium ◽  
Bounded Rationality ◽  
Real Life ◽  
Backward Induction ◽  
Rational Behavior ◽  
Normative Analysis ◽  
Cognitive Limitations ◽  
Real People ◽  
Rational Players

AbstractNormative game theory unsatisfactorily explains rational behavior. Real people do not behave as predicted, and what is prescribed as rational behavior is normally unattainable in real-life. The problem is that current normative analysis does not account for people's cognitive limitations – their bounded rationality. However, this paper develops an account of bounded rationality that explains the rationality of more realistic behavior. I focus on the Centipede Game, in which boundedly rational players explore and test others' immediate behavior, until they can apply limited backward induction. The result is that the game has a solution in the form of a subjective Nash equilibrium, which boundedly rational players can possibly realize.

Study of potential games using Ising interaction

2021 ◽  
Author(s):  
U. Tejasvi ◽  
R. D. Eithiraj ◽  
S. Balakrishnan
Keyword(s):  
Game Theory ◽  
Nash Equilibrium ◽  
Large Population ◽  
Real Life ◽  
Potential Games ◽  
Potential Game ◽  
Countable Number ◽  
Symmetric Games ◽  
Close Observation ◽  
Hamiltonian Analysis

Problems can be handled properly in game theory as long as a countable number of players are considered, whereas, in real life, we have a large number of players. Hence, games at the thermodynamic limit are analyzed in general. There is a one-to-one correspondence between classical games and the modeled Hamiltonian at a particular equilibrium condition, usually the Nash equilibrium. Such a correspondence is arrived for symmetric games, namely the Prisoner’s Dilemma using the Ising Hamiltonian. In this work, we have shown that another class of games known as potential games can be analyzed with the Ising Hamiltonian. Analysis of this work brings out very close observation with real-world scenarios. In other words, the model of a potential game studied using Ising Hamiltonian predicts behavioral aspects of a large population precisely.

scholarly journals Learning leads to bounded rationality and the evolution of cognitive bias in public goods games

2019 ◽  
Vol 9 (1) ◽  
Author(s):  
Olof Leimar ◽  
John M. McNamara
Keyword(s):  
Nash Equilibrium ◽  
Social Interactions ◽  
Bounded Rationality ◽  
Cognitive Bias ◽  
Time Horizon ◽  
Costs And Benefits ◽  
Cognitive Limitations ◽  
Public Goods Games ◽  
Social Partners ◽  
The Cost

Abstract In social interactions, including cooperation and conflict, individuals can adjust their behaviour over the shorter term through learning within a generation, and natural selection can change behaviour over the longer term of many generations. Here we investigate the evolution of cognitive bias by individuals investing into a project that delivers joint benefits. For members of a group that learn how much to invest using the costs and benefits they experience in repeated interactions, we show that overestimation of the cost of investing can evolve. The bias causes individuals to invest less into the project. Our explanation is that learning responds to immediate rather than longer-term rewards. There are thus cognitive limitations in learning, which can be seen as bounded rationality. Over a time horizon of several rounds of interaction, individuals respond to each other’s investments, for instance by partially compensating for another’s shortfall. However, learning individuals fail to strategically take into account that social partners respond in this way. Learning instead converges to a one-shot Nash equilibrium of a game with perceived rewards as payoffs. Evolution of bias can then compensate for the cognitive limitations of learning.

scholarly journals Holding a group together: non-game-theory vs. game-theory

2021 ◽  
Author(s):  
Michael Richter ◽  
Ariel Rubinstein
Keyword(s):  
Game Theory ◽  
Nash Equilibrium ◽  
Competitive Equilibrium ◽  
Solution Concept ◽  
Equilibrium Concept

Abstract Each member of a group chooses a position and has preferences regarding his chosen position. The group’s harmony depends on the profile of chosen positions meeting a specific condition. We analyse a solution concept (Richter and Rubinstein, 2020) based on a permissible set of individual positions, which plays a role analogous to that of prices in competitive equilibrium. Given the permissible set, members choose their most preferred position. The set is tightened if the chosen positions are inharmonious and relaxed if the restrictions are unnecessary. This new equilibrium concept yields more attractive outcomes than does Nash equilibrium in the corresponding game.

scholarly journals Quantum Mean-Field Games with the Observations of Counting Type

Games ◽  
2021 ◽  
Vol 12 (1) ◽  
pp. 7
Author(s):  
Vassili N. Kolokoltsov
Keyword(s):  
Game Theory ◽  
Nash Equilibrium ◽  
Open Problem ◽  
Existence And Uniqueness ◽  
Existence Of Solutions ◽  
Mean Field ◽  
Mean Field Games ◽  
Quantum Game ◽  
Quantum Games ◽  
Interesting Open Problem

Quantum games and mean-field games (MFG) represent two important new branches of game theory. In a recent paper the author developed quantum MFGs merging these two branches. These quantum MFGs were based on the theory of continuous quantum observations and filtering of diffusive type. In the present paper we develop the analogous quantum MFG theory based on continuous quantum observations and filtering of counting type. However, proving existence and uniqueness of the solutions for resulting limiting forward-backward system based on jump-type processes on manifolds seems to be more complicated than for diffusions. In this paper we only prove that if a solution exists, then it gives an ϵ-Nash equilibrium for the corresponding N-player quantum game. The existence of solutions is suggested as an interesting open problem.

Stability Analysis of Supply Chain Cooperation Contract under Asymmetric Information

2010 ◽  
Vol 44-47 ◽  
pp. 794-798 ◽  
Author(s):  
Xin Ma
Keyword(s):  
Game Theory ◽  
Supply Chain ◽  
Repeated Games ◽  
Information Structure ◽  
Transition Period ◽  
Information Economics ◽  
Real Life ◽  
The Other ◽  
Game Equilibrium ◽  
The Stability

The stability of cooperation contract is the result of abandon opportunistic behavior in the process of repeated games among the enterprise and the other subjects in the supply chain from long-term interests, and is also the foundation of healthy development for the whole supply chain. But in real life cooperation contract instability everywhere for a variety of reasons, such as ethical considerations, institutional factors, cultural factors and special reasons during the transition period and so on. From the perspective of information economics and game theory, the main game process of cooperation between enterprise and the other subjects in supply chain is not only the game of information, but also the game of interests. Information structure and the interesting structure are the important factors for the subjects of the game of the implementation of decisions and the basic contractual constraints for cooperative game equilibrium. Cooperation behaviors among the enterprise and the other subjects in the supply chain were studied on the basis of game theory, and the stability of cooperation contract is also being discussed in this paper.

scholarly journals Dinamicke igre ulaska na trziste

2005 ◽  
Vol 50 (165) ◽  
pp. 121-144
Author(s):  
Bozo Stojanovic
Keyword(s):  
Nash Equilibrium ◽  
Dynamic Games ◽  
Nash Equilibria ◽  
Dynamic Game ◽  
Backward Induction ◽  
Perfect Equilibrium ◽  
Equilibrium Concept ◽  
Reasonable Solution ◽  
Multiple Nash Equilibria ◽  
Entry Games

Market processes can be analyzed by means of dynamic games. In a number of dynamic games multiple Nash equilibria appear. These equilibria often involve no credible threats the implementation of which is not in the interests of the players making them. The concept of sub game perfect equilibrium rules out these situations by stating that a reasonable solution to a game cannot involve players believing and acting upon noncredible threats or promises. A simple way of finding the sub game perfect Nash equilibrium of a dynamic game is by using the principle of backward induction. To explain how this equilibrium concept is applied, we analyze the dynamic entry games.

Abstract WP424: Challenges of Participation in Life Activities Post-Stroke: A Qualitative Study

Stroke ◽  
2020 ◽  
Vol 51 (Suppl_1) ◽  
Author(s):  
Janita P Chau ◽  
Suzanne Hoi Shan Lo
Keyword(s):  
Qualitative Study ◽  
Residential Care ◽  
Real Life ◽  
Care Facility ◽  
Stroke Survivors ◽  
Residential Care Facility ◽  
Residential Care Facilities ◽  
Care Services ◽  
Cognitive Limitations ◽  
Care Facilities

Background and Purpose: Our previous study of 265 stroke survivors recruited immediately before discharge from two regional rehabilitation hospitals found state self-esteem, social support satisfaction, discharge location (home, residential care facility), and gender significantly accounted for 49% of the variance in depressive symptoms. The purpose of this study is to explore the challenges of promoting participation in life activities for stroke survivors. Methods: A qualitative study with individual face-to-face semi-structured interviews were conducted. Adult managerial persons who were responsible for the development of community, rehabilitation or residential care services for stroke survivors were recruited. All participants were asked to share the mission of their institutions, types of care services for stroke survivors, perceived importance of, barriers to and facilitators of promoting participation in life activities, and opportunities for enhancing stroke care services. All interviews were audio recorded and transcribed verbatim for thematic analysis. Results: A total of 11 participants were interviewed. Five were in-charge persons of stroke support groups, two were legislators, two from residential care facilities, and two from community-based organisations. Four key themes were generated: (1) Being institutionalized was found associated with lower levels of psychosocial health, (2) Stroke survivors’ physical and cognitive limitations were perceived as key challenges in promoting participation in life activities, (3) Healthcare providers placed more emphasis on promoting physical rehabilitation than social participation, and (4) Physical environment particularly in residential care facilities posed greater challenges to promoting participation in real life activities. Conclusions: This highlights major challenges for healthcare professionals who care for stroke survivors in residential care facilities. Further studies that investigate the associations between environmental barriers, psychological morbidity and participation restriction is needed.

Research on the Connection between Game Theory and Cryptography

2021 ◽  
Author(s):  
S M Nazmuz Sakib
Keyword(s):  
Game Theory ◽  
Nash Equilibrium ◽  
Operation Condition ◽  
Message Transmission ◽  
State Of Affairs ◽  
Multiparty Interaction

As may be seen, cryptography and game theory are the 2 primary parts of the phrase. game theory thinks about with optimizing a result involving 2 or a lot of well-defined parties, every with well-defined behavior. Nash equilibrium could be a notion in game theory that emphasizes the participants' mutual profit. , the unpredictability of the operational state of affairs, don't seem to be laid out in game theory. The goal of cryptography is to produce safe message transmission between genuine and approved parties. Multiparty computing could be a cryptographical technique that enables 2 or a lot of participants to calculate a perform conjointly. this can be kind of like the concept of reciprocal profit in game theory. throughout the employment of the protocol, all parties have a precise set of behavior determined, kind of like game theory. The parties, as an example, a probabilistic polynomials in nature. Cryptography doesn't specify however AN assailant could use it to breach the system just like the operation condition. In cryptography, multiparty interaction is outlined as parties communication to judge a perform on their inputs.

Bayesian Rationality and Social Epistemology

2014 ◽  
Author(s):  
Herbert Gintis
Keyword(s):  
Game Theory ◽  
Nash Equilibrium ◽  
Social Norms ◽  
Social Epistemology ◽  
Correlated Equilibrium ◽  
Epistemic Game Theory ◽  
Famous Theorem ◽  
Rational Agents ◽  
Natural Equilibrium ◽  
Bayesian Rationality

This chapter uses epistemic game theory to expand on the notion of social norms as choreographer of a correlated equilibrium, and to elucidate the socio-psychological prerequisites for the notion that social norms implement correlated equilibria. The correlated equilibrium is a much more natural equilibrium criterion than the Nash equilibrium, because of a famous theorem of Aumann (1987), who showed that Bayesian rational agents in an epistemic game G with a common subjective prior play a correlated equilibrium of G. Thus, while rationality and common priors do not imply Nash equilibrium, these assumptions do imply correlated equilibrium and social norms act not only as choreographer, but also supply the epistemic conditions for common priors.

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