Debates around the assumption of rationality in economic theory abound and are too numerous to be listed here. Traditionally, rationality of a decision maker is captured by a set of (testable) axioms, whose meaning and strength can be discussed. These rationality axioms however do not all have the same status in the sense that they bear on different things. One could actually distinguish three ...

An informal argument shows that common knowledge of rationality implies the iterative elimination of strongly dominated strategies. Rationality here means that players do not play strategies that are strongly dominated relative to their knowledge. We formalize and prove this claim. When by rationality we mean that players do not play strategies that are weakly dominated relative to their knowle...

)w hat is common and di fferent in two great thinkers’ views?rationality of faith is one of the most important issues in contemporary philosophy of religion that most philosophers of religion have discussed it . alvin plantinga and richard swinburne with theistic approach have discussed this subject. swinburne with evidentialist approach concludes that religious belief like every another belief...

This paper studies the rationality of an individual player in sequential games of perfect information played with other players who are not necessarily rational. The paper proposes a set of properties on the choice behavior and shows that they are equivalent to the rationality of an individual player at the initial node independently of the behavioral norm of the other players. Furthermore, I s...

An informal argument shows that common knowledge of rationality implies the iterative elimination of strictly dominated strategies. Rationality here means that players do not play strategies that are strictly dominanted relative to their knowledge. We formalize and prove this claim. When by rationality we mean that players do not play strategies that are weakly dominanted relative to their know...

BOUNDED RATIONALITY: rationality as exhibited by decision makers of limited abilities. The ideal of RATIONAL DECISION MAKING formalized in RATIONAL CHOICE THEORY, UTILITY THEORY, and the FOUNDATIONS OF PROBABILITY requires choosing so as to maximize a measure of expected utility that reflects a complete and consistent preference order and probability measure over all possible contingencies. Thi...

The non-dictatorial asymmetric Nash bargaining solution is characterized on the basis of independence of irrelevant alternatives, independence of equivalent utility representations, and a new axiom—moderate collective rationality. The latter is logically weaker than Roth’s (1977) strong individual rationality and logically stronger than Anbarci and Sun’s (2011) weakest collective rationality.

In 1995, Aumann proved that in games of perfect information, common knowledge of rationality yields backward induction. In 1998, Stalnaker provided an example of a game in which common knowledge of rationality, once belief revision is taken into account, does not yield backward induction. However, in some pertinent situations in this example, players are allowed to forfeit the rationality condi...

We report the results of a simulation study in which we explore the joint effect of group absorptive capacity (as the average individual rationality of the group members) and cognitive distance (as the distance between the most rational group member and the rest of the group) on the emergence of collective rationality in groups. We start from empirical results reported in the literature on grou...

The analysis of dynamic games hinges on assumptions about players’ actions and beliefs at information sets that are not actually reached during game play, and that players themselves do not expect to reach. However, it is not obvious how to elicit intended actions and conditional beliefs at such information sets. Hence, key concepts such as sequential rationality, backward induction, and forwar...