Abstract
We quantify the sensitivity of the traveler’s dilemma (Basu, Am Econ Rev 84:391–395, 1994) to perturbations from common knowledge. The perturbations entail a small uncertainty about the set of admissible actions. We show that the sensitivity scale is exponential in the range of admissible actions in the traveler’s dilemma. Such rapid growth is consistent with the intuition that a wider range makes the outcome of the traveler’s dilemma less intuitive.
| Original language | English |
|---|---|
| Pages (from-to) | 1-12 |
| Number of pages | 12 |
| Journal | International Journal of Game Theory |
| Volume | 46 |
| Issue number | 1 |
| DOIs | |
| State | Published - 1 Mar 2017 |
Bibliographical note
Publisher Copyright:© 2015, Springer-Verlag Berlin Heidelberg.
Funding
This work is based on the author’s Ph.D. thesis, done under the supervision of Professor Abraham Neyman. I am deeply grateful to Prof. Neyman for his kind and illuminating guidance. Helpful comments by Eilon Solan and Xavier Venel are gratefully acknowledged. The research was supported in part by Israel Science Foundation grants 1123/06, 1596/10, and 323/13, Sir Isaac Wolfson Chair in Economics and Business Administration, and the Department of Economics in Bar-Ilan University.
| Funders | Funder number |
|---|---|
| Department of Economics in Bar-Ilan University | |
| Israel Science Foundation | 323/13, 1123/06, 1596/10 |
Keywords
- Exponential sensitivity
- Incomplete information
- Perturbation
- Quantification
- Robustness
- Traveler’s dilemma