Please use this identifier to cite or link to this item:
Title: Evidential Equilibria: Heuristics and Biases in Static Games of Complete Information
Authors: al-Nowaihi, Ali
Dhami, Sanjit
First Published: 16-Nov-2015
Publisher: MDPI
Citation: Games, 2015, 6(4), 637-676
Abstract: Standard equilibrium concepts in game theory find it difficult to explain the empirical evidence from a large number of static games, including the prisoners’ dilemma game, the hawk-dove game, voting games, public goods games and oligopoly games. Under uncertainty about what others will do in one-shot games, evidence suggests that people often use evidential reasoning (ER), i.e., they assign diagnostic significance to their own actions in forming beliefs about the actions of other like-minded players. This is best viewed as a heuristic or bias relative to the standard approach. We provide a formal theoretical framework that incorporates ER into static games by proposing evidential games and the relevant solution concept: evidential equilibrium (EE). We derive the relation between a Nash equilibrium and an EE. We illustrate these concepts in the context of the prisoners’ dilemma game.
DOI Link: 10.3390/g6040637
ISSN: 2073-4336
eISSN: 2073-4336
Version: Publisher Version
Status: Peer-reviewed
Type: Journal Article
Rights: This is an open access article distributed under the Creative Commons Attribution License (CC BY) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Description: JEL classifications: D03 (behavioural microeconomics: underlying principles); C7 (game theory and bargaining theory)
Appears in Collections:Published Articles, Dept. of Economics

Files in This Item:
File Description SizeFormat 
games-06-00637-v2.pdfPublished (publisher PDF)394.22 kBAdobe PDFView/Open

Items in LRA are protected by copyright, with all rights reserved, unless otherwise indicated.