Bounded rationality, strategy simplification, and equilibrium (Q361802)

A new notion of equilibrium intended to capture maximally simplified strategies is introduced. However, the simplification procedure is more careful in a way that a player is not going to simplify if the simplification incents other players to deviate. Such equilibria are studied for two-player machine games, where each player chooses a finite-state automaton representing a strategy in an infinitely repeated game. Different complexity measures are analyzed.