TY - JOUR

T1 - Bounded versus unbounded rationality

T2 - The tyranny of the weak

AU - Gilboa, Itzhak

AU - Samet, Dov

N1 - Funding Information:
* We thank Ehud Kalai, Ehud Lehrer, and an anonymous referee for comments and references. t Partial support from the National Science Foundation (Grant IRI-8814672) is gratefully acknowledged. $ Partial support from the National Science Foundation (Grant SES-8720342) is gratefully acknowledged.

PY - 1989/9

Y1 - 1989/9

N2 - We examine the case of a two-person repeated game played by a boundedly rational player versus an unboundedly rational opponent. The former is restricted to strategies which are implementable by connected finite automata. It is shown that the "rational" player has a dominant strategy, and that in some cases the "weaker" (boundedly rational) player may exploit this fact to "blackmail" him. It is also shown that for a repeated zero-sum game, the rational player has a strategy which drives the automaton player's limit payoff down to his security (maxmin) level, even if he may choose any finite automaton.

AB - We examine the case of a two-person repeated game played by a boundedly rational player versus an unboundedly rational opponent. The former is restricted to strategies which are implementable by connected finite automata. It is shown that the "rational" player has a dominant strategy, and that in some cases the "weaker" (boundedly rational) player may exploit this fact to "blackmail" him. It is also shown that for a repeated zero-sum game, the rational player has a strategy which drives the automaton player's limit payoff down to his security (maxmin) level, even if he may choose any finite automaton.

UR - http://www.scopus.com/inward/record.url?scp=38249006045&partnerID=8YFLogxK

U2 - 10.1016/0899-8256(89)90009-2

DO - 10.1016/0899-8256(89)90009-2

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AN - SCOPUS:38249006045

SN - 0899-8256

VL - 1

SP - 213

EP - 221

JO - Games and Economic Behavior

JF - Games and Economic Behavior

IS - 3

ER -