Equilibrium binding agreements

Article Abstract:

Equilibrium binding agreements, based on the framework of a strategic form of a game, is found to yield inefficient results. In a model where the payoff to a player relies on the action of the others, such as in the case of equilibrium binding agreements, a potential for inefficient outcomes exists. For every assigned set of strategies that a person may use, there exist open-payoff functions that possess the characteristic that each binding agreement is inefficient. This concept also holds true for natural economic situations with coalition structures identical to equilibrium binding agreements.

Methods, Economic methods

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Evolution of beliefs and the Nash equilibrium of normal form games

Article Abstract:

A simple two-person model of learning with pattern recognition is constructed. The model allows the use by players of some obvious patterns in the path of play for a better assessment of the behavior of their opponents. An examination of the asymptotic behavior of players' beliefs when the game has a mixed-strategy Nash equilibrium reveals that a mixed Nash equilibrium in a wide class of games is unstable provided players can recognize one-length patterns.

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Mutual observability and the convergence of actions in a multi-person two-armed bandit model

Article Abstract:

Investigations into the implication of incomplete information on a multi-person two-armed bandit model showed that when players are privy to the action of other players but not to the outcome of the players actions, the tendency of the players is to prefer a single arm. This is true under the condition that a fixed margin is placed on the parameter of the two arms. The settling on the single arms is predicated on the Nash equilibrium formed.

Models, Usage, Economic research

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