Document Type

Article

Publication Date

5-26-2017

Publication Title

Theoretical Economics

ISSN

1555-7561

Volume

12

Issue

2

DOI

http://dx.doi.org/10.3982/TE2099

Abstract

This paper suggests a novel way to import the approach of axiomatic theories of individual choice into strategic settings and demonstrates the benefits of this approach. We propose both a tractable behavioral model as well as axioms applied to the behavior of the collection of players, focusing first on prisoners' dilemma games. A representation theorem establishes these axioms as the precise behavioral content of the model, and that the model's parameters are (essentially) uniquely identified from behavior. The behavioral model features magical thinking : players behave as if their expectations about their opponents' behavior vary with their own choices. The model provides a unified view of documented behavior in a range of often studied games, such as the prisoners' dilemma, the battle of the sexes, hawk–dove, and the stag hunt, and also generates novel predictions across games.

Creative Commons License

Creative Commons Attribution-Noncommercial 3.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial 3.0 License

Share

COinS