Magical thinking: A representation result

Published

Journal Article

Copyright © 2017 The Authors. 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.

Full Text

Duke Authors

Cited Authors

  • Daley, B; Sadowski, P

Published Date

  • May 1, 2017

Published In

Volume / Issue

  • 12 / 2

Start / End Page

  • 909 - 956

Electronic International Standard Serial Number (EISSN)

  • 1555-7561

International Standard Serial Number (ISSN)

  • 1933-6837

Digital Object Identifier (DOI)

  • 10.3982/TE2099

Citation Source

  • Scopus