Joe Halpern: Iterated Regret Minimization

by Yang Liu

SEMINAR IN LOGIC AND GAMES AT CUNY

Iterated Regret Minimization: a new solution concept
Joe Halpern (Cornell)
Friday, December 9, 4:15 PM
Room 9205, CUNY Graduate Center

Abstract. For some well-known games, such as the Traveler’s Dilemma or the Centipede Game, traditional game-theoretic solution concepts — most notably Nash equilibrium — predict outcomes that are not consistent with empirical observations. We introduce a new solution concept, iterated regret minimization, which exhibits the same qualitative behavior as that observed in experiments in many games of interest, including Traveler’s Dilemma, the Centipede Game, Nash bargaining, and Bertrand competition. As the name suggests, iterated regret minimization involves the iterated deletion of strategies that do not minimize regret. We provide an epistemic characterization of iterated regret minimization, and show that it predicts reasonable outcomes in many situations of interest. (This represents joint work with Rafael Pass)