First-level hypergame for investigating two decision-maker conflicts with unknown misperceptions of preferences within the framework of GMCR

Abstract

Misunderstandings of preferences are ubiquitous in various types of conflicts, and such misperceptions often involve uncertainty due to the limited cognitive abilities and information asymmetry of decision-makers. This research proposes a novel hypergame analysis approach based on the graph model for conflict resolution to address challenging disputes involving unknown misunderstandings of preferences. Specifically, a first-level hypergame model with two decision-makers is intentionally developed in this study to handle the uncertainty of preference misunderstandings in conflicts. The logical definitions of stabilities in the first-level hypergame are put forward to portray various decision-making behaviors of stakeholders when facing the vagueness of preference misperceptions, and efficiently determine possible resolutions. Algebraic representations of stabilities are also designed for the first time to enhance the computational efficiency of hypergame analyses and facilitate the development of decision support systems. Furthermore, more general definitions of individual and overall equilibria and their algebraic representations are purposefully proposed within the first-level hypergame model. This allows the decision-makers involved in a conflict to hold stable under different solution concepts. Finally, this novel approach is applied to an environmental dispute to demonstrate its practicality in addressing real-world conflicts with uncertain misperceptions of preferences. The case study shows that the uncertainty of preference misunderstandings can affect the optimal strategy selections of decision-makers and result in changes to the equilibria or outcomes of conflicts.