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Prof. Christoph Kuzmics

University of Graz, Austria

Authors: Florian Gauer and Christoph Kuzmics

Abstract: Two individuals are involved in a two-strategy conflict situation (a near zero-sum game). While they know their own payoffs, they are ex-ante uncertain about their opponent’s payoffs. They can pay a small cost to learn their opponent’s payoffs. We show that, for any positive level of costs of information acquisition, in any Bayesian Nash equilibrium of the resulting game of incomplete information the probability of getting informed about the opponent’s payoffs is bounded away from one. Let us say that a person, who does pay to get informed about her opponent’s payoffs, has cognitive empathy. If we take the population (or purification) interpretation of a mixed strategy then our result suggest that there are people who are cognitively empathic and that they are some who are not (when it comes to conflict situations), even if having cognitive empathy comes with essentially no costs.

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