Related papers: A Note on Bayesian Rationality and Correlated Equi…
The Nash equilibrium paradigm, and Rational Choice Theory in general, rely on agents acting independently from each other. This note shows how this assumption is crucial in the definition of Rational Choice Theory. It explains how a…
As autonomous AI agents increasingly mediate online platform markets, a fundamental question emerges: do these markets generate stable strategic outcomes? In repeated strategic environments, the Nash equilibrium provides a natural benchmark…
Understanding how biological organisms make decisions is of fundamental importance in understanding behavior. Such an understanding within evolutionary game theory so far has been sought by appealing to bounded rationality. Here, we present…
We propose a game-theoretic framework that incorporates both incomplete information and general ambiguity attitudes on factors external to all players. Our starting point is players' preferences on payoff-distribution vectors, essentially…
This paper builds a model of interactive belief hierarchies to derive the conditions under which judging an arbitrage opportunity requires Bayesian market participants to exercise their higher-order beliefs. As a Bayesian, an agent must…
Bayesian optimization is a coherent, ubiquitous approach to decision-making under uncertainty, with applications including multi-arm bandits, active learning, and black-box optimization. Bayesian optimization selects decisions (i.e.…
An analyst observes an agent take a sequence of actions. The analyst does not have access to the agent's information and ponders whether the observed actions could be justified through a rational Bayesian model with a known utility…
We study the role of costly information in non-cooperative two-player games when an extrinsic third party information broker is introduced asymmetrically, allowing one player to obtain information about the other player's action. This…
In dynamic noncooperative games, each player makes conjectures about other players' reactions before choosing a strategy. However, resulting equilibria may be multiple and do not always lead to desirable outcomes. These issues are typically…
We consider a trader who aims to liquidate a large position in the presence of an arbitrageur who hopes to profit from the trader's activity. The arbitrageur is uncertain about the trader's position and learns from observed price…
An equilibrium is communication-proof if it is unaffected by new opportunities to communicate and renegotiate. We characterize the set of equilibria of coordination games with pre-play communication in which players have private preferences…
This paper analyzes a finite horizon dynamic signaling game motivated by the well-known strategic information transmission problems in economics. The mathematical model involves information transmission between two agents, a sender who…
We study the problem of Bayesian learning in a dynamical system involving strategic agents with asymmetric information. In a series of seminal papers in the literature, this problem has been investigated under a simplifying model where…
We present a framework that incorporates the idea of bounded rationality into dynamic stochastic pursuit-evasion games. The solution of a stochastic game is characterized, in general, by its (Nash) equilibria in feedback form. However,…
We extend the study of learning in games to dynamics that exhibit non-asymptotic stability. We do so through the notion of uniform stability, which is concerned with equilibria of individually utility-seeking dynamics. Perhaps surprisingly,…
In game theory and artificial intelligence, decision making models often involve maximizing expected utility, which does not respect ordinal invariance. In this paper, the author discusses the possibility of preserving ordinal invariance…
Toward explaining the persistence of biased inferences, we propose a framework to evaluate competing (mis)specifications in strategic settings. Agents with heterogeneous (mis)specifications coexist and draw Bayesian inferences about their…
We develop a general game-theoretic framework for reasoning about strategic agents performing possibly costly computation. In this framework, many traditional game-theoretic results (such as the existence of a Nash equilibrium) no longer…
Strategic uncertainty complicates policy design in coordination games. To rein in strategic uncertainty, the Planner in this paper connects the problem of policy design to that of equilibrium selection. We characterize the subsidy scheme…
Two natural strategy elimination procedures have been studied for strategic games. The first one involves the notion of (strict, weak, etc) dominance and the second the notion of rationalizability. In the case of dominance the criterion of…