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The e-mail game revisited - Modeling rough inductive reasoning

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Abstract

I study the robustness of Rubinstein´s (1989) E-Mail Game results towards rough inductive reasoning. Rough induction is a form of boundedly rational reasoning where a player does not carry out every inductive step. The information structure in the E-Mail game is generalized and the conditions are characterized under which Rubinstein´s results hold. Rough induction generates a payoff dominant equilibrium where the expected payoffs change continously in the probability of "faulty" communication. The article follows one of Morris´(2001a) reactions to the E-Mail game "that one should try to come up with a model of boundedly rational behavior that delivers predictions that are insensitive to whether there is common knowledge or a large number of levels of knowledge".

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  • Uwe Dulleck, 2002. "The e-mail game revisited - Modeling rough inductive reasoning," Vienna Economics Papers vie0211, University of Vienna, Department of Economics.
    • Handle: RePEc:vie:viennp:vie0211
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    1. Stephen Morris & Hyun Song Shin, "undated". "Approximate Common Knowledge and Co-ordination: Recent Lessons from Game Theory," CARESS Working Papres 97-8, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
    2. Antonio Cabrales & Rosemarie Nagel & Roc Armenter, 2007. "Equilibrium selection through incomplete information in coordination games: an experimental study," Experimental Economics, Springer;Economic Science Association, vol. 10(3), pages 221-234, September.
    3. McKelvey, Richard D & Palfrey, Thomas R, 1992. "An Experimental Study of the Centipede Game," Econometrica, Econometric Society, vol. 60(4), pages 803-836, July.
    4. Piccione, Michele & Rubinstein, Ariel, 1997. "On the Interpretation of Decision Problems with Imperfect Recall," Games and Economic Behavior, Elsevier, vol. 20(1), pages 3-24, July.
    5. Rubinstein, Ariel, 1989. "The Electronic Mail Game: Strategic Behavior under "Almost Common Knowledge."," American Economic Review, American Economic Association, vol. 79(3), pages 385-391, June.
    6. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, April.
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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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