Date
and Location: Monday, September 12, 12:00, A 0.23
Presenter:
Christian W. Bach
Title:
Common Belief in Utility Proportional Beliefs
Authors:
Christian W. Bach & Andrés Perea (KE / EpiCenter + KE)
Abstract:
In game theory, rationalizability is one of the most basic
solution concepts. However, experimental findings suggest that people often do
not reason in line with these very basic notions. This fact is possibly due to
the requirement that zero probability be assigned to non-optimal choices in
these concepts. Here, we introduce the epistemic notion of common belief in
utility proportional beliefs which also assigns positive probability to
non-optimal choices, restricted however by the natural postulate that the
probabilities should be proportional to the utilities the respective choices
generate. With regards to experimental findings common belief in utility
proportional beliefs fares surprisingly well in explaining observed behaviour.
Moreover, we propose an algorithmic characterization of our epistemic concept.