Algorithms for cautious reasoning in games

Geir B. Asheim & Andrés Perea

Photo: International Journal of Game Theory

Published in:

International Journal of Game Theory, May 2019.

DOI: 10.1007/s00182-019-00680-6

Abstract

We provide comparable algorithms for the Dekel–Fudenberg procedure, iterated admissibility, proper rationalizability and full permissibility by means of the notions of likelihood orderings and preference restrictions. The algorithms model reasoning processes whereby each player’s preferences over his own strategies are completed by eliminating likelihood orderings. We apply the algorithms for comparing iterated admissibility, proper rationalizability and full permissibility, and provide a sufficient condition under which iterated admissibility does not rule out properly rationalizable strategies. We also use the algorithms to examine an economically relevant strategic situation, namely a bilateral commitment bargaining game. Finally, we discuss the relevance of our algorithms for epistemic analysis.

Published July 23, 2019 2:03 PM - Last modified July 23, 2019 2:06 PM