Advanced Search
MyIDEAS: Login to save this paper or follow this series

Dynamic Psychological Games

Contents:

Author Info

  • Pierpaolo Battigalli
  • Martin Dufwenberg

Abstract

Building on recent work on dynamic interactive epistemology, we extend the analysis of extensive-form psychological games (Geneakoplos, Pearce & Stacchetti, Games and Economic Behavior, 1989) to include conditional higher-order beliefs and enlarged domains of payoff functions. The approach allows modeling dynamic psychological effects (such as sequential reciprocity, psychological forward induction, and regret) that are ruled out when epistemic types are identified with hierarchies of initial beliefs. We define a notion of psychological sequential equilibrium, which generalizes the sequential equilibrium notion for traditional games, for which we prove existence under mild assumptions. Our framework also allows us to directly formulate assumptions about ‘dynamic’ rationality and interactive beliefs in order to explore strategic interaction without assuming that players beliefs are coordinated on an equilibrium. In particular, we provide an exploration of (extensive-form) rationalizability in psychological games.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: ftp://ftp.igier.uni-bocconi.it/wp/2005/287.pdf
Download Restriction: no

Bibliographic Info

Paper provided by IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University in its series Working Papers with number 287.

as in new window
Length:
Date of creation: 2005
Date of revision:
Handle: RePEc:igi:igierp:287

Contact details of provider:
Postal: via Rontgen, 1 - 20136 Milano (Italy)
Phone: 0039-02-58363301
Fax: 0039-02-58363302
Web page: http://www.igier.unibocconi.it/

Order Information:
Email:
Web: http://www.igier.unibocconi.it/en/papers/index.htm

Related research

Keywords:

Other versions of this item:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. M. Rabin, 2001. "Incorporating Fairness into Game Theory and Economics," Levine's Working Paper Archive 511, David K. Levine.
  2. Georg Kirchsteiger & Martin Dufwenberg, 2004. "A theory of sequential reciprocity," ULB Institutional Repository 2013/5899, ULB -- Universite Libre de Bruxelles.
  3. Wulf Albers & Robin Pope & Reinhard Selten & Bodo Vogt, 1999. "Experimental Evidence for Attractions to Chance," Working Papers, Bielefeld University, Center for Mathematical Economics 317, Bielefeld University, Center for Mathematical Economics.
  4. Ruffle, Bradley J., 1999. "Gift giving with emotions," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 39(4), pages 399-420, July.
  5. David K. Levine, 1998. "Modeling Altruism and Spitefulness in Experiment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(3), pages 593-622, July.
  6. Andrew Caplin & John Leahy, 2001. "Psychological Expected Utility Theory And Anticipatory Feelings," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 116(1), pages 55-79, February.
  7. Segal, Uzi & Sobel, Joel, 1999. "Tit for Tat: Foundations of Preferences for Reciprocity in Strategic Settings," University of California at San Diego, Economics Working Paper Series, Department of Economics, UC San Diego qt9xf8836g, Department of Economics, UC San Diego.
  8. Marco Ottaviani & Peter Norman Sørensen, 2006. "Reputational cheap talk," RAND Journal of Economics, RAND Corporation, RAND Corporation, vol. 37(1), pages 155-175, 03.
  9. Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 36(1), pages 11-46, March.
  10. Botond Koszegi & Matthew Rabin, 2006. "Reference-Dependent Risk Attitudes," Levine's Bibliography 122247000000001267, UCLA Department of Economics.
  11. Botond Koszegi & Matthew Rabin, 2005. "A Model of Reference-Dependent Preferences," Levine's Bibliography 784828000000000341, UCLA Department of Economics.
  12. Faruk Gul & Wolfgang Pesendorfer, 2006. "The Canonical Type Space for Interdependent Preferences," Levine's Bibliography 321307000000000457, UCLA Department of Economics.
  13. Stephen Morris, 1999. "Political Correctness," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 1242, Cowles Foundation for Research in Economics, Yale University.
  14. Loomes, Graham & Sugden, Robert, 1986. "Disappointment and Dynamic Consistency in Choice under Uncertainty," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 53(2), pages 271-82, April.
  15. Bernheim, B Douglas, 1994. "A Theory of Conformity," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 102(5), pages 841-77, October.
  16. Andrew Caplin & John Leahy, 2004. "The supply of information by a concerned expert," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 114(497), pages 487-505, 07.
  17. Loomes, Graham & Sugden, Robert, 1982. "Regret Theory: An Alternative Theory of Rational Choice under Uncertainty," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 92(368), pages 805-24, December.
  18. Dufwenberg, Martin & Lundholm, Michael, 2001. "Social Norms and Moral Hazard," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 111(473), pages 506-25, July.
  19. Kohlberg, Elon & Reny, Philip J., 1997. "Independence on Relative Probability Spaces and Consistent Assessments in Game Trees," Journal of Economic Theory, Elsevier, Elsevier, vol. 75(2), pages 280-313, August.
  20. Karni, Edi & Schlee, Edward E, 1995. "Utility Theory with Probability Dependent Outcome Valuation: Extensions and Applications," Journal of Risk and Uncertainty, Springer, Springer, vol. 10(2), pages 127-42, March.
  21. Bernheim, B Douglas, 1984. "Rationalizable Strategic Behavior," Econometrica, Econometric Society, Econometric Society, vol. 52(4), pages 1007-28, July.
  22. Michael Bacharach & Gerardo Guerra & Daniel Zizzo, 2007. "The Self-Fulfilling Property of Trust: An Experimental Study," Theory and Decision, Springer, Springer, vol. 63(4), pages 349-388, December.
  23. Fudenberg, Drew & Levine, David K, 1993. "Self-Confirming Equilibrium," Econometrica, Econometric Society, Econometric Society, vol. 61(3), pages 523-45, May.
  24. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262650401, December.
  25. Falk, Armin & Fischbacher, Urs, 2006. "A theory of reciprocity," Games and Economic Behavior, Elsevier, Elsevier, vol. 54(2), pages 293-315, February.
  26. Kolpin, Van, 1992. "Equilibrium refinement in psychological games," Games and Economic Behavior, Elsevier, Elsevier, vol. 4(2), pages 218-231, April.
  27. Gilboa, Itzhak & Schmeidler, David, 1988. "Information dependent games : Can common sense be common knowledge?," Economics Letters, Elsevier, Elsevier, vol. 27(3), pages 215-221.
  28. Ernst Fehr & Simon Gaechter, 2000. "Fairness and Retaliation: The Economics of Reciprocity," CESifo Working Paper Series 336, CESifo Group Munich.
  29. Huang, Peter H & Wu, Ho-Mou, 1994. "More Order without More Law: A Theory of Social Norms and Organizational Cultures," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 10(2), pages 390-406, October.
  30. Pierpaolo Battigali & Giacomo Bonanno, . "Recent Results On Belief, Knowledge And The Epistemic Foundations Of Game Theory," Department of Economics, California Davis - Department of Economics 98-14, California Davis - Department of Economics.
  31. John Geanakoplos, 1996. "The Hangman's Paradox and Newcomb's Paradox as Psychological Games," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 1128, Cowles Foundation for Research in Economics, Yale University.
  32. D. Pearce, 2010. "Rationalizable Strategic Behavior and the Problem of Perfection," Levine's Working Paper Archive 523, David K. Levine.
  33. Pierpaolo Battigalli & Martin Dufwenberg, 2007. "Guilt in Games," American Economic Review, American Economic Association, American Economic Association, vol. 97(2), pages 170-176, May.
  34. Drew Fudenberg & David K. Levine, 1996. "The Theory of Learning in Games," Levine's Working Paper Archive 624, David K. Levine.
  35. John Geanakoplos & David Pearce & Ennio Stacchetti, 2010. "Psychological Games and Sequential Rationality," Levine's Working Paper Archive 587, David K. Levine.
  36. Battigalli, Pierpaolo, 1996. "Strategic Independence and Perfect Bayesian Equilibria," Journal of Economic Theory, Elsevier, Elsevier, vol. 70(1), pages 201-234, July.
  37. Dufwenberg, Martin & Kirchsteiger, Georg, 2000. "Reciprocity and wage undercutting," European Economic Review, Elsevier, Elsevier, vol. 44(4-6), pages 1069-1078, May.
  38. Rubinstein, Ariel, 1991. "Comments on the Interpretation of Game Theory," Econometrica, Econometric Society, Econometric Society, vol. 59(4), pages 909-24, July.
  39. Dufwenberg, Martin, 2002. "Marital investments, time consistency and emotions," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 48(1), pages 57-69, May.
  40. Pierpaolo Battigalli, . "Hierarchies of Conditional Beliefs and Interactive Epistemology in Dynamic Games," Working Papers, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University 111, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  41. Werlang, Sérgio Ribeiro da Costa, 1988. "Common knowledge," Economics Working Papers (Ensaios Economicos da EPGE) 118, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
  42. Geanakoplos, John & Pearce, David & Stacchetti, Ennio, 1989. "Psychological games and sequential rationality," Games and Economic Behavior, Elsevier, Elsevier, vol. 1(1), pages 60-79, March.
  43. Jon Elster, 1998. "Emotions and Economic Theory," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 36(1), pages 47-74, March.
  44. Guerra, Gerardo & John Zizzo, Daniel, 2004. "Trust responsiveness and beliefs," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 55(1), pages 25-30, September.
  45. Steffen Huck & Dorothea Kübler, 2000. "Social pressure, uncertainty, and cooperation," Economics of Governance, Springer, Springer, vol. 1(3), pages 199-212, December.
  46. Li, Jing, 2008. "The power of conventions: A theory of social preferences," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 65(3-4), pages 489-505, March.
  47. Brandenburger Adam & Dekel Eddie, 1993. "Hierarchies of Beliefs and Common Knowledge," Journal of Economic Theory, Elsevier, Elsevier, vol. 59(1), pages 189-198, February.
  48. Pope, Robin, 2004. "Biases from omitted risk effects in standard gamble utilities," Journal of Health Economics, Elsevier, Elsevier, vol. 23(4), pages 695-735, July.
  49. Battigalli, Pierpaolo & Siniscalchi, Marciano, 2002. "Strong Belief and Forward Induction Reasoning," Journal of Economic Theory, Elsevier, Elsevier, vol. 106(2), pages 356-391, October.
  50. Reny, Philip J, 1992. "Backward Induction, Normal Form Perfection and Explicable Equilibria," Econometrica, Econometric Society, Econometric Society, vol. 60(3), pages 627-49, May.
  51. Dufwenberg, Martin & Gneezy, Uri, 2000. "Measuring Beliefs in an Experimental Lost Wallet Game," Games and Economic Behavior, Elsevier, Elsevier, vol. 30(2), pages 163-182, February.
  52. Aumann, Robert & Brandenburger, Adam, 1995. "Epistemic Conditions for Nash Equilibrium," Econometrica, Econometric Society, Econometric Society, vol. 63(5), pages 1161-80, September.
  53. Gary Charness & Martin Dufwenberg, 2004. "Promises and Partnership," Levine's Bibliography 122247000000000001, UCLA Department of Economics.
  54. Pearce, David G, 1984. "Rationalizable Strategic Behavior and the Problem of Perfection," Econometrica, Econometric Society, Econometric Society, vol. 52(4), pages 1029-50, July.
  55. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262061414, December.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:igi:igierp:287. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.