Abstract
We show how the tensor product for a 2×2 game with Knightian uncertainty can be calculated. We discuss also a specific example in which we derive the Nash equilibria. The discussion is an application of game theory in terms of tensor products of capacities, introduced in the paper by Kozhan and Zarichnyi (Econ Theory, 2007, Forthcoming).
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References
Choquet G. (1953) Theory of capacities. Ann Inst Fourier 5, 139–296
Kozhan, R., Zarichnyi, M.: Nash equilibria for games in capacities. Econ Theory (2007) (Forthcoming)
Knight F. (1921) Risk, uncertainty and profit. Boston, Houghton Mifflin
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We are grateful to Professors R. Kozhan and M. Zarichnyi for their very helpful comments on an earlier version of the manuscript and to an anonymous referee for his constructive suggestions.
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Glycopantis, D., Muir, A. Nash equilibria with Knightian uncertainty; the case of capacities. Econ Theory 37, 147–159 (2008). https://doi.org/10.1007/s00199-007-0276-x
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DOI: https://doi.org/10.1007/s00199-007-0276-x