How to Play Out of Equilibrium

Please note that the venue for this seminar has recently changed, and it it will now be held in Seminar Room A, Manor Road Building

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We propose a novel concept for how to make choices in games without assuming that an equilibrium will be played. It can be applied when there are several players in the same role. The methodology is easy to implement, extremely versatile and can also incorporate incomplete information and uncertainty. We show its applicability in many examples, including Cournot and Bertrand competition and first price auctions. For instance, in markets modelled as double auctions we find it best for players to bid their true value, contrasting the finding for Nash equilibrium analysis that it is impossible to conduct trade efficiently.