The values of information in some nonzero sum games

Abstract

The paper considers nonzero-sum games in which the players' utility functions are not known with certainty. It tries to clarify the various definitions of information value in such games, provides the reader with a class of games with simple solutions, and presents experimental results corroborating the theoretical analysis.

On the value of information in a strategic conflict

“…Allen (1986) studied the value of information to consumers in a general equilibrium framework. Levine and Ponssard (1977) compared the values of public, private, and secret information to the players involved in a game of incomplete information. However, they did not consider the strategic behavior of the owner of information in assessing the values of the different types of information.…”

Secret information acquisition in Cournot markets

“…A v ery simple example taken from Levine and Ponssard 1977 illustrates how striking the di erence between secret and private 4 information acquisition can be. Suppose that Nature determines which of the two bimatrix games of Fig.…”

Surveys in game theory and related topics

“…In general, there could be a difficulty in determining a unique expected payoff (to each player), because even in complete information games there can be several Nash equilibria with different playoffs. However, in all the games of Levine and Ponssard (1977) and Borm (1987) the strategic behaviour of the players is (uniquely) determined. Because we will only discuss that kind of games, it is allowed to talk about "the" expected payof f to player 1 and "the" expected payoff to player 2.…”

“…The study is restricted to relatively simple one shot games, in which the players has to decide only once. This section subscribes to works of Levine and Ponssard (1977) and Borm (1987).…”