TY - JOUR
T1 - Delayed agreements and nonexpected utility
AU - Fershtman, Chaim
AU - Safra, Zvi
AU - Vincent, Daniel
PY - 1991/11
Y1 - 1991/11
N2 - The unexplained occurrence of inefficient delays in reaching agreement is known in the economics literature as the "Hicks paradox." This paper describes a strategic situation in which players may play a simultaneous move game either before or after a move of Nature. The structure is such that if the players were expected utility maximizers, they would be indifferent over the order of play. However, if at least one of the players is a nonexpected utility maximizer, for example, if player one has preferences over lotteries which exhibit betweenness and fanning out, such a player may strictly prefer to wait before playing the game. If both players exhibit fanning out and betweenness, then there exist games in which both prefer to delay agreement.
AB - The unexplained occurrence of inefficient delays in reaching agreement is known in the economics literature as the "Hicks paradox." This paper describes a strategic situation in which players may play a simultaneous move game either before or after a move of Nature. The structure is such that if the players were expected utility maximizers, they would be indifferent over the order of play. However, if at least one of the players is a nonexpected utility maximizer, for example, if player one has preferences over lotteries which exhibit betweenness and fanning out, such a player may strictly prefer to wait before playing the game. If both players exhibit fanning out and betweenness, then there exist games in which both prefer to delay agreement.
UR - http://www.scopus.com/inward/record.url?scp=44949276373&partnerID=8YFLogxK
U2 - 10.1016/0899-8256(91)90013-5
DO - 10.1016/0899-8256(91)90013-5
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AN - SCOPUS:44949276373
SN - 0899-8256
VL - 3
SP - 423
EP - 437
JO - Games and Economic Behavior
JF - Games and Economic Behavior
IS - 4
ER -