Article ID: | iaor20163734 |
Volume: | 81 |
Issue: | 3 |
Start Page Number: | 339 |
End Page Number: | 356 |
Publication Date: | Sep 2016 |
Journal: | Theory and Decision |
Authors: | Weber Thomas |
Keywords: | game theory, simulation |
Newcomb’s problem is viewed as a dynamic game with an agent and a superior being as players. Depending on whether or not a risk‐neutral agent’s confidence in the superior being, as measured by a subjective probability assigned to the move order, exceeds a threshold or not, one obtains the one‐box outcome or the two‐box outcome, respectively. The findings are extended to an agent with arbitrary increasing utility, featuring in general two thresholds. All solutions require only minimal assumptions about the being’s payoffs, and the being is always sure to predict the agent’s choice in equilibrium. The relevant Nash equilibria are subgame‐perfect, except for risk‐seeking agents where for intermediate beliefs, the being may be unable to ensure perfect prediction without relying on noncredible threats. Lastly, analogies of Newcomb’s problem to the commitment problem on a continuum are discussed.