Non-Cooperative Games

CentER Discussion Paper No. 2014-077

TILEC Discussion Paper No. 2014-051

29 Pages Posted: 19 Dec 2014

See all articles by Eric van Damme

Eric van Damme

TILEC and CentER, Tilburg University

Multiple version iconThere are 2 versions of this paper

Date Written: December 2014

Abstract

We describe non-cooperative game models and discuss game theoretic solution concepts. Some applications are also noted. Conventional theory focuses on the question ‘how will rational players play?’, and has the Nash equilibrium at its core. We discuss this concept and its interpretations, as well as refinements (perfect and stable equilibria) and relaxations (rationalizability and correlated equilibria). Motivated by experiments that show systematic theory violations, behavioral game theory aims to integrate insights from psychology to get better answers to the question ‘how do humans play?’. We provide an overview of the observed regularities and briefly sketch (beginnings of) theories of boundedly rational play.

Keywords: Backward induction, behavioral economics, correlated equilibrium, decision making, experimental economics, game, game theory, incomplete information, noncooperative, Nash equilibrium, perfect equilibrium, rationality, rationalizability, sequential equilibrium, stable equilibrium

JEL Classification: C72, D03

Suggested Citation

van Damme, Eric E.C., Non-Cooperative Games (December 2014). CentER Discussion Paper No. 2014-077, TILEC Discussion Paper No. 2014-051, Available at SSRN: https://ssrn.com/abstract=2540015 or http://dx.doi.org/10.2139/ssrn.2540015

Eric E.C. Van Damme (Contact Author)

TILEC and CentER, Tilburg University ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 3045 (Phone)
+31 13 466 3066 (Fax)

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