Fershtman, Chaim, Safra, Zvi and Vincent, Daniel (1991) Delayed agreements and nonexpected utility. Games and Economic Behavior, 3 (4). pp. 423-437. doi:10.1016/0899-8256(91)90013-5 ISSN 0899-8256.

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Abstract

The unexplained occurrence of inefficient delays in reaching agreement is known in the economics literature as the “Hicks paradox.” This paper describes a strategic situation in which players may play a simultaneous move game either before or after a move of Nature. The structure is such that if the players were expected utility maximizers, they would be indifferent over the order of play. However, if at least one of the players is a nonexpected utility maximizer, for example, if player one has preferences over lotteries which exhibit betweenness and fanning out, such a player may strictly prefer to wait before playing the game. If both players exhibit fanning out and betweenness, then there exist games in which both prefer to delay agreement.

Item Type:	Journal Article
Subjects:	H Social Sciences > HB Economic Theory
Divisions:	Faculty of Social Sciences > Warwick Business School > Behavioural Science Faculty of Social Sciences > Warwick Business School
Library of Congress Subject Headings (LCSH):	Utility theory, Game theory
Journal or Publication Title:	Games and Economic Behavior
Publisher:	Elsevier
ISSN:	0899-8256
Official Date:	November 1991
Dates:	Date Event November 1991 Published
Volume:	3
Number:	4
Page Range:	pp. 423-437
DOI:	10.1016/0899-8256(91)90013-5
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access

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