Two-Person Second-Order Games, Part 1: Formulation and Transition Anatomy
It is well known that human psychology determines his/her action and behavior. This fact has not been fully incorporated in game theory. This paper intends to incorporate human psychology in formulating games as people play them. In Part 1 of the paper, we formulate a two-person game by the habit...
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| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Springer/Plenum Publishers
2009
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| Subjects: | |
| Online Access: | http://irep.iium.edu.my/7871/1/Two-Person_Second-Order_Games%2C_Part_1_Formulation.pdf http://irep.iium.edu.my/7871/ http://dx.doi.org/10.1007/s10957-008-9487-y |
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| Summary: | It is well known that human psychology determines his/her action and behavior.
This fact has not been fully incorporated in game theory. This paper intends
to incorporate human psychology in formulating games as people play them. In Part
1 of the paper, we formulate a two-person game by the habitual domain theory and
the Markov chain theory. Using the habitual domains theory, we present a new model
describing the evolution of the states of mind of players over time, the two-person
second-order game. We introduce the concept of the focal mind profile as well as the
solution concept of the win-win mind profile. In addition, we provide also a method
to predict the average number of steps needed for a game to reach a focal or win-win
mind profile. Then, in Part 2 of the paper, under some reasonable assumptions, we
derive the possibility theorem stating that it is always possible to reach a win-win
mind profile when suitable conditions are satisfied. |
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