Ambiguous Payoffs Upend Traditional Game Theory, Reveal Real-World Complexities
Players in games usually make decisions based on clear information about their payoffs. However, in real life, players often face missing or uncertain payoffs, making it hard to find the best strategy. This study introduces a new concept called ambiguous Nash equilibrium to handle these situations. It shows that a Nash equilibrium is a special case of this new concept when players have accurate information. The researchers also provide an example to demonstrate how this approach can solve real-life game theory problems.