Abstract
Game theory, or to be more precise, game theory dealing with non-zero-sum games has been dominated by the concept of Nash equilibria, i. e. by the assumption that players maximise their utility given the behaviour of their opponent, since it was established more than 50 years ago. There are in general good reasons for the assumption that players maximise their utility because such an approach is consistent, comparatively easy to handle, and often leads to well defined and correct predictions. However, criticism have been put forward and counterexamples have been found increasingly frequently in the last few years especially in experiments. In addition, in repeated games the concept of rationality has been found not to be very helpful because according to the folk theorem many types of behaviour are stable if the game is repeated infinitely often (cf. e. g. Binmore 1995 for a detailed description of the folk theorem and its implications).
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Brenner, T. (1999). Cognitive Learning in Prisoner’s Dilemma Situations. In: Brenner, T. (eds) Computational Techniques for Modelling Learning in Economics. Advances in Computational Economics, vol 11. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-5029-7_14
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DOI: https://doi.org/10.1007/978-1-4615-5029-7_14
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