Non-cooperative games with prospect theory players and dominated strategies

• 成果类型: Article
• 署名作者: Metzger, Lars Peter; Rieger, Marc Oliver
• 署名单位: Dortmund University of Technology; Universitat Trier
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2019.04.001
• 发表日期: 2019
• 页码: 396-409
• 关键词: Prospect theory; framing; Reference dependent utility; Rank dependent probability weighting; Nash equilibrium; stochastic dominance; Dominance of strategies

摘要

We investigate a framework for non-cooperative games in normal form where players have behavioral preferences following Prospect Theory (PT) or Cumulative Prospect Theory (CPT). On theoretical grounds CPT is usually considered to be the superior model, since it normally does not violate first order stochastic dominance in lottery choices. We find, however, that CPT when applied to games may select purely dominated strategies, while PT does not. For both models we also characterize the cases where mixed dominated strategies are preserved and where violations may occur. (C) 2019 Elsevier Inc. All rights reserved.