Download or read book Quantal Response Equilibrium written by Jacob K. Goeree and published by Princeton University Press. This book was released on 2016-06-28 with total page 322 pages. Available in PDF, EPUB and Kindle. Book excerpt: Quantal Response Equilibrium presents a stochastic theory of games that unites probabilistic choice models developed in psychology and statistics with the Nash equilibrium approach of classical game theory. Nash equilibrium assumes precise and perfect decision making in games, but human behavior is inherently stochastic and people realize that the behavior of others is not perfectly predictable. In contrast, QRE models choice behavior as probabilistic and extends classical game theory into a more realistic and useful framework with broad applications for economics, political science, management, and other social sciences. Quantal Response Equilibrium spans the range from basic theoretical foundations to examples of how the principles yield useful predictions and insights in strategic settings, including voting, bargaining, auctions, public goods provision, and more. The approach provides a natural framework for estimating the effects of behavioral factors like altruism, reciprocity, risk aversion, judgment fallacies, and impatience. New theoretical results push the frontiers of models that include heterogeneity, learning, and well-specified behavioral modifications of rational choice and rational expectations. The empirical relevance of the theory is enhanced by discussion of data from controlled laboratory experiments, along with a detailed users' guide for estimation techniques. Quantal Response Equilibrium makes pioneering game-theoretic methods and interdisciplinary applications available to a wide audience.
Download or read book Testing the Foundations of Quantal Response Equilibrium written by Mathew D. McCubbins and published by . This book was released on 2013 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Quantal response equilibrium (QRE) has become a popular alternative to the standard Nash equilibrium concept in game theoretic applications. It is well known that human subjects do not regularly choose Nash equilibrium strategies. It has been hypothesized that subjects are limited by strategic uncertainty or that subjects have broader social preferences over the outcome of games. These two factors, among others, make subjects boundedly-rational. QRE, in essence, adds a logistic error function to the strict, knife-edge predictions of Nash equilibria. What makes QRE appealing, however, also makes it very difficult to test, because almost any observed behavior may be consistent with different parameterizations of the error function. We present the first steps of a research program designed to strip away the underlying causes of the strategic errors thought to be modeled by QRE. If these causes of strategic error are correct explanations for the deviations, then their removal should enable subjects to choose Nash equilibrium strategies. We find, however, that subjects continue to deviate from predictions even when the reasons presumed by QRE are removed. Moreover, the deviations are different for each and every game, and thus QRE would require the same subjects to have different error parame-terizations. While we need more expansive testing of the various causes of stra-tegic error, in our judgment, therefore, QRE is not useful at predicting human behavior, and is of limited use in explaining human behavior across even a small range of similar decisions.
Download or read book Three Essays on Quantal Response Equilibrium Model written by Kang-Oh Yi and published by . This book was released on 1999 with total page 182 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Quantal Response Equilibria for Extensive Form Games written by Richard D. McKelvey and published by . This book was released on 1995 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Quantal Response Equilibrium with Symmetry written by Evan Friedman and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study an axiomatic variant of quantal response equilibrium (QRE) for normal form games that augments the regularity axioms (Goeree et al., 2005) with various forms of “symmetry” across players and actions. The model refines regular QRE, generalizes logit QRE, and is tractable in many applications. The main result is a representation theorem that characterizes the model's set-valued predictions by taking unions and intersections of simple sets. We completely characterize the predictions for (almost) all 2x2 games, a corollary of which is to show, in co- ordination games, which Nash equilibrium is selected by the principal branch of the logit correspondence. As applications, we consider three classic games: public goods provision with heterogenous costs of participation, jury voting with unanimity, and the infinitely repeated prisoner's dilemma. For each, we characterize all equilibria within a particular large class. An analysis of existing experiments shows the model's potential for organizing experimental data.
Download or read book On the Empirical Content of Quantal Response Equilibrium written by Philip A. Haile and published by . This book was released on 2006 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Behavioral Game Theory written by Russell Golman and published by MDPI. This book was released on 2021-01-07 with total page 128 pages. Available in PDF, EPUB and Kindle. Book excerpt: How do interacting decision-makers make strategic choices? If they’re rational and can somehow predict each other’s behavior, they may find themselves in a Nash equilibrium. However, humans display pervasive and systematic departures from rationality. They often do not conform to the predictions of the Nash equilibrium, or its various refinements. This has led to the growth of behavioral game theory, which accounts for how people actually make strategic decisions by incorporating social preferences, bounded rationality (for example, limited iterated reasoning), and learning from experience. This book brings together new advances in the field of behavioral game theory that help us understand how people actually make strategic decisions in game-theoretic situations.
Download or read book Is Behavioral Economics Doomed written by David K. Levine and published by Open Book Publishers. This book was released on 2012 with total page 154 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this book, David K. Levine questions the idea that behavioral economics is the answer to economic problems. He explores the successes and failures of contemporary economics both inside and outside the laboratory, and asks whether popular behavioral theories of psychological biases are solutions to the failures. The book not only provides an overview of popular behavioral theories and their history, but also gives the reader the tools for scrutinizing them.
Download or read book Handbook of Experimental Game Theory written by C. M. Capra and published by Edward Elgar Publishing. This book was released on 2020-10-30 with total page 448 pages. Available in PDF, EPUB and Kindle. Book excerpt: The aim of this Handbook is twofold: to educate and to inspire. It is meant for researchers and graduate students who are interested in taking a data-based and behavioral approach to the study of game theory. Educators and students of economics will find the Handbook useful as a companion book to conventional upper-level game theory textbooks, enabling them to compare and contrast actual behavior with theoretical predictions. Researchers and non-specialists will find valuable examples of laboratory and field experiments that test game theoretic propositions and suggest new ways of modeling strategic behavior. Chapters are organized into several sections; each section concludes with an inspirational chapter, offering suggestions on new directions and cutting-edge topics of research in experimental game theory.
Download or read book Quantal Response Methods for Equilibrium Selection in Normal Form Games written by Boyu Zhang and published by . This book was released on 2014 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper describes a general framework for equilibrium selection by tracing the graph of the quantal response equilibrium (QRE) correspondence as a function of the estimation error. If a quantal response function satisfies C2 continuity, monotonicity and cumulativity, the graph of QRE correspondence generically includes a unique branch that starts at the centroid of the strategy simplex and converges to a unique Nash equilibrium as noises vanish. This equilibrium is called the limiting QRE of the game. We then provide sufficient conditions for the limiting QRE in normal form games, J×J symmetric games and J×J bimatrix games. Based on these conditions, the effects of payoff transformations and adding/eliminating dominated strategies on equilibrium selection are investigated. We find that in J×J symmetric games, any strict Nash equilibrium can be selected as the limiting QRE by appropriately adding a single strictly dominated strategy.
Download or read book Quantal Response Equilibrium in a Double Auction written by Claudia Neri and published by . This book was released on 2015 with total page 14 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper establishes existence and uniqueness of Quantal Response Equilibrium (QRE) in a double auction. The concept of QRE has the intuitive property that a deviation from best response is less likely the higher the cost associated with the deviation itself. Thanks to such property, the QRE accommodates stochastic elements in the analysis of the strategic decision-making that arises in the double auction. By providing a theoretical alternative to the Bayesian Nash Equilibrium model, the QRE model offers an appealing tool for analyzing data of double auction experiments.
Download or read book Quantal Response Equilibrium as a Structural Model for Estimation written by James R. Bland and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: One of the original objectives of the (logit) quantal response equilibrium (LQRE) model was to provide a method for structural estimation of behaviour in games, when behaviour deviated from Nash equilibrium predictions. To date, only Chapter 6 of the book on quantal response equilibrium by Goeree et al. (2016) focuses on how such estimation can be implemented. We build on that chapter to provide here a more detailed treatment of the methodological issues of implementing maximum likelihood estimation of QRE. We compare the equilibrium correspondence and empirical payoff approaches to estimation, and identify some considerations in interpreting the results of those approaches when applied to the same data on the same game. We also provide a more detailed "field guide" to using numerical continuation methods to accomplish estimation, including guidance on how to tailor implementations to games with different structures.
Download or read book A Quantal Response Equilibrium Model of Order Statistic Games written by Kang-Oh Yi and published by . This book was released on 1999 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Quantal Response Equilibria in a Generalized Volunteer s Dilemma and Step Level Public Goods Games with Binary Decision written by Toshiji Kawagoe and published by . This book was released on 2015 with total page 16 pages. Available in PDF, EPUB and Kindle. Book excerpt: The present paper fully characterizes equilibria of a generalized Volunteer's Dilemma game, which is an integration of the volunteer's dilemma game and the step-level public goods game with binary decision. We also examined the explanatory power of a widely accepted model with bounded rationality, the quantal response equilibrium (QRE). It is shown that the performance of the QRE model is better in explaining laboratory data.
Download or read book Quantal Response Equilibrium with Non monotone Probabilities written by Suren Basov and published by . This book was released on 2003 with total page 13 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Quantal Response Potentials and Stochastic Stability of Equilibria written by Takashi Ui and published by . This book was released on 1997 with total page 178 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Analytic Narratives written by Robert H. Bates and published by Princeton University Press. This book was released on 2020-07-21 with total page 260 pages. Available in PDF, EPUB and Kindle. Book excerpt: Students of comparative politics have long faced a vexing dilemma: how can social scientists draw broad, applicable principles of political order from specific historical examples? In Analytic Narratives, five senior scholars offer a new and ambitious methodological response to this important question. By employing rational-choice and game theory, the authors propose a way of extracting empirically testable, general hypotheses from particular cases. The result is both a methodological manifesto and an applied handbook that political scientists, economic historians, sociologists, and students of political economy will find essential. In their jointly written introduction, the authors frame their approach to the origins and evolution of political institutions. The individual essays that follow demonstrate the concept of the analytic narrative--a rational-choice approach to explain political outcomes--in case studies. Avner Greif traces the institutional foundations of commercial expansion in twelfth-century Genoa. Jean-Laurent Rosenthal analyzes how divergent fiscal policies affected absolutist European governments, while Margaret Levi examines the transformation of nineteenth-century conscription laws in France, the United States, and Prussia. Robert Bates explores the emergence of a regulatory organization in the international coffee market. Finally, Barry Weingast studies the institutional foundations of democracy in the antebellum United States and its breakdown in the Civil War. In the process, these studies highlight the economic role of political organizations, the rise and deterioration of political communities, and the role of coercion, especially warfare, in political life. The results are both empirically relevant and theoretically sophisticated. Analytic Narratives is an innovative and provocative work that bridges the gap between the game-theoretic and empirically driven approaches in political economy. Political historians will find the use of rational-choice models novel; theorists will discover arguments more robust and nuanced than those derived from abstract models. The book improves on earlier studies by advocating--and applying--a cross-disciplinary approach to explain strategic decision making in history.
