Senior Honors Thesis: "Quantal Response: Models of Irrationality and Correlation in Games"

Ben Zod

Abstract: In this paper we delve into game theoretical model that incorporates a statistical generalization of Nash Equilibrium. This model accounts for irrationality and lack of knowledge in games, while traditional game theory assumes all players are rational. Although the quantal response model often models empirical data much better than Nash’s solution concept, we show several limitations and difficulties with the model.  We find that quantal response is an excellent model of human behavior in games, but it needs some reformatting to account for correlation between strategies.

 

Advisor: John Shareshian