A_Course_in_Game_Theory_-_Martin_J._Osborne 20

A_Course_in_Game_Theory_-_Martin_J._Osborne 20 - Page 4 the...

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Page 4 the agents' activities. In a competitive analysis of this situation we look for a level of pollution consistent with the actions that the agents take when each of them regards this level as given. By contrast, in a game theoretic analysis of the situation we require that each agent's action be optimal given the agent's expectation of the pollution created by the combination of his action and all the other agents' actions. 1.4 Rational Behavior The models we study assume that each decision-maker is "rational" in the sense that he is aware of his alternatives, forms expectations about any unknowns, has clear preferences, and chooses his action deliberately after some process of optimization. In the absence of uncertainty the following elements constitute a model of rational choice. • A set A of actions from which the decision-maker makes a choice. • A set C of possible consequences of these actions. A consequence function
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This note was uploaded on 09/10/2011 for the course DEFR 090234589 taught by Professor Vinh during the Spring '10 term at Aarhus Universitet, Aarhus.

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