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Title:Probabilistic choice in games: Properties of Rosenthal's t-solutions PDF Logo
Authors:Voorneveld, Mark
Issue Date:2003
Series/Report no.:SSE/EFI Working Paper Series in Economics and Finance 542
Abstract:In t-solutions, quantal response equilibria based on the linear probability model as introduced in R.W. Rosenthal (1989, Int. J. Game Theory 18, 273-292), choice probabilities are related to the determination of leveling taxes. The set of t-solutions coincides with the set of Nash equilibria of a game with quadratic control costs. Increasing the rationality of the players allows them to successively eliminate higher levels of strictly dominated actions. Moreover, there exists a path of t-solutions linking uniform randomization to Nash equilibrium.
Subjects:quantal response equilibrium
t-solutions
linear probability model
JEL:C72
Document Type:Working Paper
Appears in Collections:SSE/EFI Working Paper Series in Economics and Finance, EFI - The Economic Research Institute, Stockholm School of Economics

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