Re-Interpretation of the Solution Concept for “Non-Cooperative” Games

by Thomas Schelling


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A discussion of coordination-game theory, suggesting that the “solution in the strict sense” of a tacit nonzero-sum game is to be understood largely by reference to its signalling qualities. Since other sources of signals may be present even in the purely mathematical formulation of the game, the particular qualities of the “solution in the strict sense” are but one of many potential determinants of a “rational solution.” It is an empirical question — not a matter of deduction a priori — of what signals can be appreciated. A theory is neither a good normative theory nor a good descriptive theory if players can consistently do better than the theory predicts by using rational process that the theory cannot recognize.

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