Strategic Uncertainty in Markets for Nonrenewable Resources: A Level-k Approach
Joint Authors
Vierhaus, Ingmar
van Veldhuizen, Roel
Fügenschuh, Armin
Source
Discrete Dynamics in Nature and Society
Issue
Vol. 2017, Issue 2017 (31 Dec. 2017), pp.1-8, 8 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2017-10-30
Country of Publication
Egypt
No. of Pages
8
Main Subjects
Abstract EN
Existing models of nonrenewable resources assume that sophisticated agents compete with other sophisticated agents.
This study instead uses a level-k approach to examine cases where the focal agent is uncertain about the strategy of his opponent or predicts that the opponent will act in a nonsophisticated manner.
Level-0 players are randomized uniformly across all possible actions, and level-k players best respond to the action of player k-1.
We study a dynamic nonrenewable resource game with a large number of actions.
We are able to solve for the level-1 strategy by reducing the averaging problem to an optimization problem against a single action.
We show that lower levels of strategic reasoning are close to the Walras and collusive benchmark, whereas higher level strategies converge to the Nash-Hotelling equilibrium.
These results are then fitted to experimental data, suggesting that the level of sophistication of participants increased over the course of the experiment.
American Psychological Association (APA)
Vierhaus, Ingmar& van Veldhuizen, Roel& Fügenschuh, Armin. 2017. Strategic Uncertainty in Markets for Nonrenewable Resources: A Level-k Approach. Discrete Dynamics in Nature and Society،Vol. 2017, no. 2017, pp.1-8.
https://search.emarefa.net/detail/BIM-1151254
Modern Language Association (MLA)
Vierhaus, Ingmar…[et al.]. Strategic Uncertainty in Markets for Nonrenewable Resources: A Level-k Approach. Discrete Dynamics in Nature and Society No. 2017 (2017), pp.1-8.
https://search.emarefa.net/detail/BIM-1151254
American Medical Association (AMA)
Vierhaus, Ingmar& van Veldhuizen, Roel& Fügenschuh, Armin. Strategic Uncertainty in Markets for Nonrenewable Resources: A Level-k Approach. Discrete Dynamics in Nature and Society. 2017. Vol. 2017, no. 2017, pp.1-8.
https://search.emarefa.net/detail/BIM-1151254
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-1151254