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| Author: | Lo, K. C. |
| Title: | Nash equilibrium without mutual knowledge of rationality |
| Journal: | Economic Theory
1999 : VOL. 14:3, p. 621-633 |
| Index terms: | ECONOMETRICS RATIONALITY EQUILIBRIUM THEORY |
| Language: | eng |
| Abstract: | This study proposes a concept called cautious equilibrium that generalizes Nash equilibrium in terms of preferences in two person strategic games. Players do not necessarily know the rationality of opponents but they view rationality as infinitely more than irrationaly. Cautious equilibrium predicts that a player might take a cautious strategy that is not a best response in any Nash equilibrium. |
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