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Game Theory without Decision-Theoretic Paradoxes

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Algorithmic Decision Theory (ADT 2009)

Part of the book series: Lecture Notes in Computer Science ((LNAI,volume 5783))

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Abstract

Most work in game theory is conducted under the assumption that the players are expected utility maximizers. Expected utility is a very tractable decision model, but is prone to well-known paradoxes and empirical violations (Allais 1953, Ellsberg 1961), which may induce systematic biases in game-theoretic predictions. La Mura (2009) introduced a projective generalization of expected utility (PEU) which avoids the dominant paradoxes, while remaining quite tractable. We show that every finite game with PEU players has an equilibrium, and discuss several examples of PEU games.

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Authors and Affiliations

  1. Department of Economics and Information Systems, HHL - Leipzig Graduate School of Management, Jahnallee 59, 04109, Leipzig, Germany

    Pierfrancesco La Mura

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  1. Pierfrancesco La Mura
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Editors and Affiliations

  1. Department of Pure and Applied Mathematics, University of Padova, Via Trieste 63, 35121, Padova, Italy

    Francesca Rossi

  2. LAMSADE-CNRS, University of Paris Dauphine, Place du Maréchal De Lattre de Tassigny, 75775, Paris Cedex 16, France

    Alexis Tsoukias

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La Mura, P. (2009). Game Theory without Decision-Theoretic Paradoxes. In: Rossi, F., Tsoukias, A. (eds) Algorithmic Decision Theory. ADT 2009. Lecture Notes in Computer Science(), vol 5783. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-04428-1_28

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  • DOI: https://doi.org/10.1007/978-3-642-04428-1_28

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-04427-4

  • Online ISBN: 978-3-642-04428-1

  • eBook Packages: Computer ScienceComputer Science (R0)

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