Game Theory and Asymmetric information
GAME THEORY AND ASYMMETRIC INFORMATION
The standard economic approach assumes that every commercial participant has his or her interest. But the assumption may not always be right, sometimes people act reasonably and treat others with care without only regarding on profit maximization (Dur, and Glazer, 2007, 120). Some experiments show that there is the presence of other preferences in the behavior of making decisions (Itoh, 2004, 20). The article explains the game theory and asymmetric data which can help economists in generating decisions on investment, output, price and the outcomes of making such choices.
Background and Significance
In the game setting, one section of the game understands something that a different part does not know (Lacomba, Lagos, and Perote, 2017, 5). In asymmetric data, one side in the industrial background may have more information compared to the other (Buckdahn, Quincampoix, Rainer and Xu, 2016, 800). One of the research is the analysis of the players in the market and assume that both have an individual interest.
Several authors agree that all players in the economy do not become motivated by personal interest some have a fair mind which regards on the appropriate treatment of employees (Li, Zhou and Wang, 2013, 2700). Ultimatum game argues that the boss might be affected by unequal treatment of workers.
Research Design and Metho…
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