Behavioral Game Theory: Experiments in Strategic Interaction / Edition 1

Behavioral Game Theory: Experiments in Strategic Interaction / Edition 1

by Colin F. Camerer
     
 

ISBN-10: 0691090394

ISBN-13: 9780691090399

Pub. Date: 02/25/2003

Publisher: Russell Sage Foundation

Game theory, the formalized study of strategy, began in the 1940s by asking how emotionless geniuses should play games, but ignored until recently how average people with emotions and limited foresight actually play games. This book marks the first substantial and authoritative effort to close this gap. Colin Camerer, one of the field's leading figures, uses

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Overview

Game theory, the formalized study of strategy, began in the 1940s by asking how emotionless geniuses should play games, but ignored until recently how average people with emotions and limited foresight actually play games. This book marks the first substantial and authoritative effort to close this gap. Colin Camerer, one of the field's leading figures, uses psychological principles and hundreds of experiments to develop mathematical theories of reciprocity, limited strategizing, and learning, which help predict what real people and companies do in strategic situations. Unifying a wealth of information from ongoing studies in strategic behavior, he takes the experimental science of behavioral economics a major step forward. He does so in lucid, friendly prose.

Behavioral game theory has three ingredients that come clearly into focus in this book: mathematical theories of how moral obligation and vengeance affect the way people bargain and trust each other; a theory of how limits in the brain constrain the number of steps of "I think he thinks . . ." reasoning people naturally do; and a theory of how people learn from experience to make better strategic decisions. Strategic interactions that can be explained by behavioral game theory include bargaining, games of bluffing as in sports and poker, strikes, how conventions help coordinate a joint activity, price competition and patent races, and building up reputations for trustworthiness or ruthlessness in business or life.

While there are many books on standard game theory that address the way ideally rational actors operate, Behavioral Game Theory stands alone in blending experimental evidence and psychology in a mathematical theory of normal strategic behavior. It is must reading for anyone who seeks a more complete understanding of strategic thinking, from professional economists to scholars and students of economics, management studies, psychology, political science, anthropology, and biology.

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Product Details

ISBN-13:
9780691090399
Publisher:
Russell Sage Foundation
Publication date:
02/25/2003
Series:
Roundtable Series in Behavioral Economics Series
Edition description:
New Edition
Pages:
544
Product dimensions:
6.40(w) x 9.50(h) x 1.44(d)

Table of Contents

Preface
1Introduction1
1.1What is Game Theory Good For?5
1.2Three Examples7
1.3Experimental Regularity and Behavioral Game Theory20
App. A1.1Basic Game Theory25
App. A1.2Experimental Design34
2Dictator, Ultimatum, and Trust Games43
2.1Ultimatum and Dictator Games: Basic Results48
2.2Methodological Variables59
2.3Demographic Variables63
2.4Culture68
2.5Descriptive Variables: Labeling and Context74
2.6Structural Variables75
2.7Trust Games83
2.8Theory101
3Mixed-Strategy Equilibrium118
3.1Early Studies121
3.2Modern Studies125
3.3Subjective Randomization and Mixed Strategies134
3.4Explicit Randomization138
3.5Patent Race and Location Games with Mixed Equilibria142
3.6Two Field Studies145
4Bargaining151
4.1Unstructured Bargaining153
4.2Structured Bargaining161
4.3Bargaining under Incomplete Information182
5Dominance-Solvable Games199
5.1Simple Dominance-Solvable Games203
5.2Beauty Contest Games209
5.3Games in Which Iterated Reasoning Decreases Payoffs218
5.4When More Iteration is Better: The "Dirty Faces" Game236
5.5The "Groucho Marx" Theorem in Zero-Sum Betting239
5.6Structural Models of Decision Rules and Levels of Reasoning242
5.7Theories254
AppRaw Choices in Email Game and Additional Data259
6Learning265
6.1Theories of Learning266
6.2Reinforcement Learning273
6.3Belief Learning283
6.4Imitation Learning295
6.5Comparative Studies298
6.6Experience-Weighted Attraction (EWA) Learning304
6.7Rule Learning324
6.8Econometric Studies of Estimation Properties330
7Coordination336
7.1Matching Games341
7.2Asymmetric Players: Battle of the Sexes353
7.3Market Entry Games367
7.4Payoff-Asymmetric Order-Statistic Games375
7.5Selecting Selection Principles396
7.6Applications: Path-Dependence, Market Adoption, and Corporate Culture399
AppPsycholinguistics405
8Signaling and Reputation408
8.1Simple Signaling Games and Adaptive Dynamics411
8.2Specialized Signaling Games427
8.3Reputation Formation445
9Conclusion: What Do We Know, and Where Do We Go?465
9.1Summary of Results466
9.2Top Ten Open Research Questions473
AppDesign Details477
References497
Index535

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