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|Title:||Minimax regret and strategic uncertainty|
Schlag, Karl H.
|Citation:||Journal of Economic Theory, 2010, 145 (1), pp. 264-286.|
|Abstract:||This paper introduces a new solution concept, a minimax regret equilibrium, which allows for the possibility that players are uncertain about the rationality and conjectures of their opponents. We provide several applications of our concept. In particular, we consider pricesetting environments and show that optimal pricing policy follows a non-degenerate distribution. The induced price dispersion is consistent with experimental and empirical observations (Baye and Morgan (2004)).|
|Description:||This is the author's final draft of the paper published as Journal of Economic Theory, 2010, 145 (1), pp. 264-286. The final version is available from http://www.sciencedirect.com/science/journal/00220531. Doi: 10.1016/j.jet.2009.07.005|
|Appears in Collections:||Published Articles, Dept. of Economics|
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