Games, Goals, and Bounded Rationality

Abstract

A generalization of the standard n-person game is presented, with flexible information requirements suitable for players constrained by bounded rationality. Strategies (complete contingency plans) are replaced by "policies," i. e., end-mean pairs of candidate goals and "controls" (partial contingency plans). The existence of individual objective functions over the joint policy choice set is axiomatized in terms of primitive preference and probability orders. Conditions are given for the existence of pure policy Nash equilibrium points in n-person games, and pure policy Nash bargaining and equilibrium threat solutions in 2-person policy games. Connectedness of the policy and payoff sets is not required.