Joint beliefs in conflictual coordination games

Peter Vanderschraaf, Diana Richards

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

The traditional solution concept for noncooperative game theory is the Nash equilibrium, which contains an implicit assumption that players' probability distributions satisfy probabilistic independence. However, in games with more than two players, relaxing this assumption results in a more general equilibrium concept based on joint beliefs (Vanderschraaf, 1995). This article explores the implications of this joint-beliefs equilibrium concept for two kinds of conflictual coordination games: crisis bargaining and public goods provision. We find that, using updating consistent with Bayes' rule, players' beliefs converge to equilibria in joint beliefs which do not satisfy probabilistic independence. In addition, joint beliefs greatly expand the set of mixed equilibria. On the face of it, allowing for joint beliefs might be expected to increase the prospects for coordination. However, we show that if players use joint beliefs, which may be more likely as the number of players increases, then the prospects for coordination in these games declines vis-à-vis independent beliefs.

Original languageEnglish (US)
Pages (from-to)287-310
Number of pages24
JournalTheory and Decision
Volume42
Issue number3
DOIs
StatePublished - 1997
Externally publishedYes

Keywords

  • Beliefs
  • Cooperation
  • Coordination
  • Dynamics

ASJC Scopus subject areas

  • Decision Sciences(all)
  • Developmental and Educational Psychology
  • Arts and Humanities (miscellaneous)
  • Applied Psychology
  • Social Sciences(all)
  • Economics, Econometrics and Finance(all)
  • Computer Science Applications

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