American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Lying for Strategic Advantage: Rational and Boundedly Rational Misrepresentation of Intentions
American Economic Review
vol. 93,
no. 1, March 2003
(pp. 133–149)
Abstract
Starting from an example of the Allies' decision to feint at Calais and attack Normandy on D-Day, this paper models misrepresentation of intentions to competitors or enemies. Allowing for the possibility of bounded strategic rationality and rational players' responses to it yields a sensible account of lying via costless, noiseless messages. In some leading cases, the model has generically unique pure-strategy sequential equilibria, in which rational players exploit boundedly rational players, but are not themselves fooled. In others, the model has generically essentially unique mixed-strategy sequential equilibria, in which rational players' strategies protect all players from exploitation.Citation
Crawford, Vincent, P. 2003. "Lying for Strategic Advantage: Rational and Boundedly Rational Misrepresentation of Intentions ." American Economic Review, 93 (1): 133–149. DOI: 10.1257/000282803321455197JEL Classification
- C72 Noncooperative Games
- D74 Conflict; Conflict Resolution; Alliances
- D80 Information, Knowledge, and Uncertainty: General