Sophisticated Players and Sophisticated Agents
Tilburg University, CentER Working Paper No. 1998-110
Posted: 31 Oct 1999
Date Written: 1998
A sophisticated player is an individual who takes the action of the opponents, in a strategic situation, as determined by decision of rational opponents, and acts accordingly. A sophisticated agent is rational in the choice of his action, but ignores the fact that he is part of a strategic situation. We discuss a notion of equilibrium with sophisticated agents, we provide conditions for its existence, and argue that it differs systematically from the Nash equilibrium.
JEL Classification: D81, D83
Suggested Citation: Suggested Citation