Preservation of Misperceptions – Stability Analysis of Hypergames

Abstract

The present paper tries to model how some kinds of misperceptions of agents are preserved in a decision making situation where multiple agents are involved. We use hypergame model which is a theoretical framework to deal with agents who may misperceive situations (Bennett et al., 1979). After each play of hypergame, agents may update their perceptions based on the result, that is, the structure of the hypergame may change. However, in some case, they may not, and the hypergame is ‘stable’, that is, their misperceptions are preserved. To discuss stability of hypergames, we newly define a solution concept what we call stable hyper Nash equilibrium. Using these ideas, we analyze the stability. To demonstrate change in perceptions of agents, we consider agent-based intrinsic motivation. Although we provide general foundation for discussion, we analyze a game called battle of sexes as an example case.