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

Simon Grant; Atsushi Kajii; Ben Polak

doi:10.1016/S0165-1765(01)00496-7

"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 journal › Article › peer-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 language	English
Pages (from-to)	275-286
Number of pages	12
Journal	Economics Letters
Volume	73
Issue number	3
DOIs	https://doi.org/10.1016/S0165-1765(01)00496-7
Publication status	Published - Dec 2001
Externally published	Yes

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10.1016/S0165-1765(01)00496-7

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title = "{"}Third down with a yard to go{"}: Recursive expected utility and the Dixit-Skeath conundrum",

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.",

keywords = "C72, Comparative statics, D81, Non-expected utility, Recursive expected utility, Strictly competitive games",

author = "Simon Grant and Atsushi Kajii and Ben Polak",

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AU - Kajii, Atsushi

AU - Polak, Ben

PY - 2001/12

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N2 - 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.

AB - 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.

KW - C72

KW - Comparative statics

KW - D81

KW - Non-expected utility

KW - Recursive expected utility

KW - Strictly competitive games

UR - https://www.scopus.com/pages/publications/0035642072

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DO - 10.1016/S0165-1765(01)00496-7

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SP - 275

EP - 286

JO - Economics Letters

JF - Economics Letters

IS - 3

ER -

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

Abstract

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