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1984

Economic Theory

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Games, Goals, And Bounded Rationality, Leigh S. Tesfatsion Dec 1983

Games, Goals, And Bounded Rationality, Leigh S. Tesfatsion

Leigh Tesfatsion

A generalization of the standard n-person game is presented, with flexible information requirements suitable for players constrained by certain types of bounded rationality. Strategies (complete contingency plans) are replaced by “policies”, i.e., endmean pairs of goals and controls (partial contingency plans), which results in naturally disconnected player choice sets. Well-known existence theorems for pure strategy Nash equilibrium and bargaining solutions are generalized to policy games by modifying connectedness (convexity) requirements.