Exploring Relations Between Decision Analysis and Game Theory
19 Pages
Posted: 16 Jan 2007
University of Pennsylvania - The Wharton School; National Bureau of Economic Research (NBER)
Duke University - Fuqua School of Business, Economics Group
Date Written: January 16, 2007
Abstract
Many authors have argued that proper modeling of the strategic interaction between players requires a game theoretic approach as opposed to a decision theoretic approach. We argue in this paper, however, that there are many environments in which decision analysis can deal with strategic interactions just as well and we present equivalence results for such environments. These equivalence results allow the prescriptive decision analyst to use the standard tools that a sound decision analysis requires, including decision trees and sensitivity analysis, even when confronted with strategic settings.
Keywords: Decision Analysis, Game Theory
Suggested Citation:
Suggested Citation
van Binsbergen, Jules H. and Marx, Leslie M., Exploring Relations Between Decision Analysis and Game Theory (January 16, 2007). Available at SSRN: https://ssrn.com/abstract=957636 or http://dx.doi.org/10.2139/ssrn.957636
