Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/56200
Authors: 
Voorneveld, Mark
Year of Publication: 
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

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