A cardinal characterization of the Rubinstein-Safra-Thomson axiomatic bargaining theory

Article Abstract:

Researchers A. Rubinstein, Z. Safra and W. Thomson (RST) established a new formula for achieving Nash equilibrium in two-person bargaining games. The RST approach assumed that the players will act naturally in making decisions and evaluating risks. However, the RST approach's usefulness is limited to only two-person games in which decisions that do not consider Rank Dependent Expected Utility and other unexpected influences. A modification of the RST approach which takes into account these influences is presented.

Decision-making, Decision making, Negotiation, Negotiations

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Reputation and commitment in two-person repeated games without discounting

Article Abstract:

The behavior of players in a two-person repeated game without discounting in the presence of uncertainty is studied. Specifically, it is shown that if one of the players is an automaton committed to a certain stage-game strategy, a lower bound on the Nash equilibrium payoffs 'to a normal type of this player' occurs. The results are extended to games wherein non-negligible probabilities concerning the commitment to either pure or mixed actions exist.

Econometrics

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Subjective probability monotonicity: or how Machina's mom may also be probabilistically sophisticated

Article Abstract:

Savage's 1972 theory of choice under uncertainty allowed agents' preferences for outcomes and beliefs about states of the world to be stated in such a manner as to conform to sophisticated mathematical probabilities. However, Savage's theories may not be applicable to all cases. To prove this, probabilistically sophisticated agents whose induced lottery preferences follow neither Savage's theories nor those of Machina and Schmeidler are presented.

Statistical decision, Statistical decision theory

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