TY - JOUR
T1 - Mixed-strategy nash equilibrium based upon expected utility and quadratic utility
AU - CHENG, Leonard K.
AU - ZHU, Min
PY - 1995/1/1
Y1 - 1995/1/1
N2 - The notion of a mixed-strategy Nash equilibrium suffers from three inherent difficulties. First, given the equilibrium strategies of other players, there are many best replies. Second, the equilibrium is unstable. Third, comparative statics results are counterintuitive. We demonstrate that these difficulties all have their origin in von Neumann and Morgenstern′s expected utility. In contrast, players with “quadratic utility” have unique best replies and the Nash equilibrium appears to yield intuitive comparative statics results. Journal of Economic Literature Classification Number: C72.
AB - The notion of a mixed-strategy Nash equilibrium suffers from three inherent difficulties. First, given the equilibrium strategies of other players, there are many best replies. Second, the equilibrium is unstable. Third, comparative statics results are counterintuitive. We demonstrate that these difficulties all have their origin in von Neumann and Morgenstern′s expected utility. In contrast, players with “quadratic utility” have unique best replies and the Nash equilibrium appears to yield intuitive comparative statics results. Journal of Economic Literature Classification Number: C72.
UR - http://www.scopus.com/inward/record.url?scp=0000153243&partnerID=8YFLogxK
U2 - 10.1006/game.1995.1011
DO - 10.1006/game.1995.1011
M3 - Journal Article (refereed)
AN - SCOPUS:0000153243
SN - 0899-8256
VL - 9
SP - 139
EP - 150
JO - Games and Economic Behavior
JF - Games and Economic Behavior
IS - 2
ER -