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Mindreading and Endogenous Beliefs in Games

Listed author(s):
  • Lauren Larrouy

    (Université Côte d'Azur
    GREDEG CNRS)

  • Guilhem Lecouteux

    (Université Côte d'Azur
    GREDEG CNRS)

We argue that a Bayesian explanation of strategic choices in games requires introducing a psychological theory of belief formation. We highlight that beliefs in epistemic game theory are derived from the actual choice of the players, and cannot therefore explain why Bayesian rational players should play the strategy they actually chose. We introduce the players’ capacity of mindreading in a game theoretical framework with the simulation theory, and characterise the beliefs that Bayes rational players could endogenously form in games. We show in particular that those beliefs need not be ratifiable, and therefore that rational players can form action-dependent beliefs.

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File URL: http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2017-01.pdf
File Function: Revised version, 2017-06
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Paper provided by Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis in its series GREDEG Working Papers with number 2017-01.

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Length: 52 pages
Date of creation: Jan 2017
Date of revision: Jun 2017
Publication status: Forthcoming in Journal of Economic Methodology
Handle: RePEc:gre:wpaper:2017-01
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