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
(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