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In Search of a Generalized Concept of Rationality

Author

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  • Iskakov, A.

    (V.A. Trapeznikov Institute of Control Sciences RAS, Moscow, Russia)

  • Iskakov, M.

    (V.A. Trapeznikov Institute of Control Sciences RAS, Moscow, Russia)

Abstract

The paper recapitulates basic problems that arise in the game-theoretic models, when traditional assumptions about the rationality of players are violated. Some examples of bounded rationality models describing the strategic interdependence of players are provided. In particular we consider the theories of oligopolistic behavior, the models of bounded strategic thinking, equilibrium in secure strategies and equilibria contained by counter-threats. We discuss the ways to reconcile the traditional and boundedly rational approaches. We briefly review the main strands of modern game theory aimed at developing a generalized concept of rationality, which would incorporate strategic interaction and farsighted strategic thinking of players. Promising directions include interactive epistemology, learning theory and evolutionary models.

Suggested Citation

  • Iskakov, A. & Iskakov, M., 2017. "In Search of a Generalized Concept of Rationality," Journal of the New Economic Association, New Economic Association, vol. 34(2), pages 181-189.
    • Handle: RePEc:nea:journl:y:2017:i:34:p:181-189
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    References listed on IDEAS

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    Cited by:

    1. Iskakov, M., 2022. "Existence theorems for Nash equilibrium and equilibrium in secure strategies," Journal of the New Economic Association, New Economic Association, vol. 56(4), pages 12-27.

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    More about this item

    Keywords

    rationality; bounded rationality; strategic interdependence; farsightedness; strategic thinking; interactive epistemology; learning theory; evolutionary models;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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