A Fuzzy Logic and Default Reasoning Model of Social Norm and Equilibrium Selection in Games Under Unforeseen Contingencies

University of Trento Economics Discussion Paper No. 13

26 Pages Posted: 1 Jun 2005  

Lorenzo Sacconi

University of Trento - Department of Economics and Management

Stefano Moretti

University of Genoa - Department of Mathematics

Date Written: December 2004

Abstract

This paper focuses on the role that social norms play in the selection of equilibrium points seen as social conventions under unforeseen contingencies - that is, their role in the emergence of regularities of behavior which are self-enforcing and effectively adhered to by bounded rational agents due to their self-policing incentives. Differently stated, given a set of game situations imperfectly described, we want to understand how general and abstract norms provide at least the starting point for a norm-based equilibrium selection reasoning procedure which in the end will be able to determine which equilibrium point, belonging to perfectly described games, will be played as the unique solution of each imperfectly described game. In order to solve such a problem we introduces a selection process based on the reformulation of default logic in terms of possibility theory.

Keywords: Social Norms, Equilibrium selection, Unforeseen Contingencies, Fuzzy Logic, Possibility Theory, Default Reasoning

JEL Classification: C70, C69, D83

Suggested Citation

Sacconi, Lorenzo and Moretti, Stefano, A Fuzzy Logic and Default Reasoning Model of Social Norm and Equilibrium Selection in Games Under Unforeseen Contingencies (December 2004). University of Trento Economics Discussion Paper No. 13. Available at SSRN: https://ssrn.com/abstract=731645 or http://dx.doi.org/10.2139/ssrn.731645

Lorenzo Sacconi (Contact Author)

University of Trento - Department of Economics and Management ( email )

via Inama 5
I-38100 Trento
Italy

Stefano Moretti

University of Genoa - Department of Mathematics ( email )

Via Dodecaneso 35
16146 Genoa
Italy
+39 010 353 6838 (Phone)
+39 010 353 6752 (Fax)

HOME PAGE: http://www.dima.unige.it/~moretti/CV_moretti.pdf

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