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Full farsighted rationality

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  • Karos, Dominik
  • Robles, Laura

Abstract

An abstract game consists of a set of states, preferences over states, and an effectivity correspondence specifying what coalitions are allowed to replace one state by another one. Agents are called farsighted if, when deciding whether to support a coalition's move, they compare the status quo to the long term outcome following their deviation. Yet, this definition of farsightedness ignores a coalition's option to remain at the status quo allowing another coalition to move: agents are not fully farsighted. Therefore, we introduce extended expectation functions, which assign to each state a list of pairs consisting of a state and a coalition that is expected to move from the former to the latter. They endow agents with an expectation about what any deviation vis-a-vis maintaining the status quo entails. We impose three rationality axioms and provide a characterization of extended expectation functions that satisfy our axioms in terms of coalition behavior.

Suggested Citation

  • Karos, Dominik & Robles, Laura, 2021. "Full farsighted rationality," Games and Economic Behavior, Elsevier, vol. 130(C), pages 409-424.
    • Handle: RePEc:eee:gamebe:v:130:y:2021:i:c:p:409-424
    DOI: 10.1016/j.geb.2021.09.004
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    References listed on IDEAS

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    Cited by:

    1. Mert Kimya, 2023. "Coalition Formation Under Dominance Invariance," Dynamic Games and Applications, Springer, vol. 13(2), pages 480-496, June.
    2. P. Jean-Jacques Herings & Ana Mauleon & Vincent Vannetelbosch, 2023. "Social Rationalizability with Mediation," Dynamic Games and Applications, Springer, vol. 13(2), pages 440-461, June.
    3. G.-Herman Demeze-Jouatsa & Dominik Karos, 2023. "Farsighted Rationality in Hedonic Games," Dynamic Games and Applications, Springer, vol. 13(2), pages 462-479, June.
    4. Mert Kimya, 2024. "Axiomatic Approach to Farsighted Coalition Formation," Working Papers 2024-03, University of Sydney, School of Economics.
    5. Mert Kimya, 2024. "Power, Status and the Stability of Hierarchies," Working Papers 2024-04, University of Sydney, School of Economics.
    6. Kimya, Mert, 2022. "Farsighted objections and maximality in one-to-one matching problems," Journal of Economic Theory, Elsevier, vol. 204(C).
    7. Cai, Xinyue & Kimya, Mert, 2023. "Stability of alliance networks," Games and Economic Behavior, Elsevier, vol. 140(C), pages 401-409.
    8. Robert P. Gilles & Lina Mallozzi & Roberta Messalli, 2023. "Emergent Collaboration in Social Purpose Games," Dynamic Games and Applications, Springer, vol. 13(2), pages 566-588, June.
    9. Demeze-Jouatsa, Ghislain-Herman & Karos, Dominik, 2021. "Farsighted Rationality in Hedonic Games," Center for Mathematical Economics Working Papers 654, Center for Mathematical Economics, Bielefeld University.

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