Martin Dufwenberg, University of Arizona. "Regret Games"
ESOP seminar. Martin Dufwenberg is a Professor of Economics at the University of Arizona. He will present the paper: "Regret Games", coauthored by Senran Lin.
How does regret influence strategic interaction and risky choice? We develop a game-theoretic approach to exploring this issue. Regret is captured by the gap between the payoff a player actually gets and his expected counterfactual payoff from the would-be best strategy among foregone actions. Ex-post beliefs, therefore, determine a player's regret, which is affected by a player's information across end nodes. We find novel aspects regarding how players interpret chance moves, mixed strategies, and the playing orders.