Honam Mathematical Journal (호남수학학술지)

The Honam Mathematical Society (호남수학회)
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AN APPROACH TO THE PROBLEM OF COMMON POOL RESOURCES THROUGH AN EXTENSION OF THE EQUILIBRIUM CONCEPT

  • Bae, Jaegug (Department of Applied Mathematics, Korea Maritime University) ;
  • Kim, Jongseok (Department of International Trade and Economics, Korea Maritime University) ;
  • Kang, Eun Sook (Department of Maritime Administration, Korea Maritime University)
  • Received : 2013.03.25
  • Accepted : 2013.06.05
  • Published : 2013.06.25
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Abstract

Many studies of experimental economics have produced outcomes which contradict the predictions of Nash equilibrium, which relies heavily upon the premise of selfishness of an individual. In the games involving contexts of social conflicts represented by the prisoners' dilemma game, the experiments yields outcomes quite different from what are predicted by the conventional wisdom. In order to fill this gap between the conventional Nash Equilibrium and experimental outcomes, non-selfish (or other-regarding) motives of human behavior are introduced and then a new equilibrium concept, RAE-equilibrium is developed. It is also proved that an RAE-equilibrium exists under quite general conditions. Then it is applied to the prisoners' dilemma game that some of the experimental outcomes can be explained.

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References

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