TY - JOUR
T1 - Multidimensional reasoning in games
T2 - Framework, equilibrium, and applications
AU - Arad, Ayala
AU - Rubinstein, Ariel
N1 - Funding Information:
*Arad: Coller School of Management, Tel Aviv University, Tel Aviv, Israel 69978 (email: [email protected]. ac.il); Rubinstein: School of Economics, Tel Aviv University, Tel Aviv, Israel 69978 and Department of Economics, New York University, New York, NY 10012 (email: [email protected]). John Asker was coeditor for this article. We are thankful to Hadar Binsky, Neta Klein, and Hadar Weisman for research assistance. We are grateful to Kemal Yildiz, Dong Wey, and especially Michael Richter for useful comments. The first author acknowledges financial support from The Blavatnik Interdisciplinary Cyber Research Center and the Henry Crown Institute of Business Research in Israel. The second author acknowledges financial support from ERC grant 269143.
Publisher Copyright:
© 2019 American Economic Association.
PY - 2021
Y1 - 2021
N2 - We develop a framework for analyzing multidimensional reasoning in strategic interactions, which is motivated by two experimental findings: (i) in games with a large and complex strategy space, players tend to think in terms of strategy characteristics rather than the strategies themselves; (ii) in their strategic deliberation, players consider one characteristic at a time. A multidimensional equilibrium is a vector of characteristics representing a stable mode of behavior: a player does not wish to modify any one characteristic. The concept is applied to several economic interactions, where a vector of characteristics, rather than a distribution of strategies, is identified as stable.
AB - We develop a framework for analyzing multidimensional reasoning in strategic interactions, which is motivated by two experimental findings: (i) in games with a large and complex strategy space, players tend to think in terms of strategy characteristics rather than the strategies themselves; (ii) in their strategic deliberation, players consider one characteristic at a time. A multidimensional equilibrium is a vector of characteristics representing a stable mode of behavior: a player does not wish to modify any one characteristic. The concept is applied to several economic interactions, where a vector of characteristics, rather than a distribution of strategies, is identified as stable.
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U2 - 10.1257/mic.20170322
DO - 10.1257/mic.20170322
M3 - Article
AN - SCOPUS:85071154650
SN - 1945-7669
VL - 11
SP - 285
EP - 318
JO - American Economic Journal: Microeconomics
JF - American Economic Journal: Microeconomics
IS - 3
ER -