Minimax regret and strategic uncertainty

• 成果类型: Article
• 署名作者: Renou, Ludovic; Schlag, Karl H.
• 署名单位: University of Leicester; Pompeu Fabra University
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2009.07.005
• 发表日期: 2010
• 页码: 264-286
• 关键词: Minimax regret; rationality; conjectures; price dispersion; auction

摘要

This paper introduces a new solution concept, a minimax regret equilibrium, which allows for the possibility that players are uncertain about the rationality and conjectures of their opponents. We provide several applications of our concept. In particular, we consider price-setting environments and show that optimal pricing policy follows a non-degenerate distribution. The induced price dispersion is consistent with experimental and empirical observations (Baye and Morgan (2004) [4]). (C) 2009 Elsevier Inc. All rights reserved.