Stability of equilibria for population games with uncertain parameters under bounded rationality

Under the assumption that the range of varying uncertain parameters is known, some results of existence and stability of equilibria for population games with uncertain parameters are investigated in this paper. On the basis of NS equilibria in classical noncooperative games, the concept of NS equilibria for population games with uncertain parameters is defined. Using some hypotheses about the continuity and convexity of payoff functions, the existence of NS equilibria in population games is also proved by Fan–Glicksberg fixed point theorem. Furthermore, we establish a bounded rationality model of population games with uncertain parameters, and draw the conclusions about the stability of NS equilibrium in this model by constructing the rationality function and studying its properties.

Bounded Rationality of Generalized Abstract Fuzzy Economies

By using a nonlinear scalarization technique, the bounded rationality modelMfor generalized abstract fuzzy economies in finite continuous spaces is established. Furthermore, by using the modelM, some new theorems for structural stability and robustness to (λ,ϵ)-equilibria of generalized abstract fuzzy economies are proved.

‘BUT CAN'T WE GET THE SAME THING WITH A STANDARD MODEL?’ RATIONALIZING BOUNDED-RATIONALITY MODELS

This paper discusses a common criticism of economic models that depart from the standard rational-choice paradigm - namely, that the phenomena addressed by such models can be ‘rationalized’ by some standard model. I criticize this criterion for evaluating bounded-rationality models. Using a market model with boundedly rational consumers due to Spiegler (2006a) as a test case, I show that even when it initially appears that a bounded-rationality model can be rationalized by a standard model, rationalizing models tend to come with unwarranted ‘extra baggage’. I conclude that we should impose a greater burden of proof on rationalizations that are offered in refutation of bounded-rationality models.