February 26 (Thursday) (10:00-11:00) room C.510 (new building, 5th floor)
Ákos Balázs (Corvinus University of Budapest)
Generalised solution concepts in games without expected utility
We propose a general framework for strategic interaction that relaxes the expected utility assumption and instead works directly with players’ conditional preference relations (Gilboa & Schmeidler, 2003; Perea, 2025). By leveraging their epistemic foundations, we show that three classical solution concepts admit natural generalisations to this broader setting without altering their underlying reasoning principles. First, we introduce the iterated elimination of never-optimal choices as an analogue of the iterated elimination of strictly dominated choices, characterised by common belief in rationality. We also prove that it always yields a non-empty solution. Second, we generalise Nash equilibrium, preserving its characterisation by common belief in rationality and simple beliefs. Third, we extend correlated equilibrium, characterised by common belief in rationality and a common prior. While the latter two solution concepts are not guaranteed to exist in all games, we identify a sufficient condition for their existence, which we call strong continuity. This property requires the set of beliefs where a choice is weakly preferred to another to be closed, for any player and any choice pair. We also show that this condition is equivalent to imposing a continuous utility representation on the game, but weaker than imposing an expected utility representation. Our results demonstrate that the foundations of game theory are robust to the relaxation of expected utility, opening the door to richer and more flexible models of strategic interaction.
The talk is based on joint work with Andrés Perea.