Bounded versus unbounded rationality: The tyranny of the weak

Itzhak Gilboa; Dov Samet

doi:10.1016/0899-8256(89)90009-2

Bounded versus unbounded rationality: The tyranny of the weak

Itzhak Gilboa^*, Dov Samet

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

Abstract

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.

Original language	English
Pages (from-to)	213-221
Number of pages	9
Journal	Games and Economic Behavior
Volume	1
Issue number	3
DOIs	https://doi.org/10.1016/0899-8256(89)90009-2
State	Published - Sep 1989
Externally published	Yes

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note = "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.",

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Bounded versus unbounded rationality: The tyranny of the weak

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