"Third down with a yard to go": Recursive expected utility and the Dixit-Skeath conundrum

Simon Grant*, Atsushi Kajii, Ben Polak

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)

Abstract

In two-outcome strictly competitive games, equilibrium mixed strategies do not depend on ultimate prizes. Dixit and Skeath [Games of Strategy (1999) Norton, New York] find this 'counter-intuitive'. We show this invariance comes from reduction, not independence; and provide conditions for 'intuitive' comparative statics under recursive expected utility.

Original languageEnglish
Pages (from-to)275-286
Number of pages12
JournalEconomics Letters
Volume73
Issue number3
DOIs
Publication statusPublished - Dec 2001
Externally publishedYes

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