Bounded rationality in differential games

Publication date
2017
Document type
Working paper
Author
Organisational unit
Language
English
Abstract
The present paper proposes a myopic, boundedly rational heuristic for individual decision-making in differential game settings. I demonstrate that this type of behaviour converges to Nash equilibrium in infinitely repeated stage games without a state variable if the stage game is strategically symmetric. Two examples are used to illustrate the application of the heuristic in differential games.
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