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Psychological Game Theory

Author

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  • Pierpaolo Battigalli
  • Martin Dufwenberg

Abstract

The mathematical framework of psychological game theory is useful for describing many forms of motivation where preferences depend directly on own or others'beliefs. It allows for incorporation of emotions, reciprocity, image concerns, and self-esteem in economic analysis. We explain how and why, discussing basic theory, a variety of sentiments, experiments, and applied work. Keywords: psychological game theory; belief-dependent motivation; reciprocity; emotions; image concerns; self-esteem JEL codes: C72; D91

Suggested Citation

  • Pierpaolo Battigalli & Martin Dufwenberg, 2019. "Psychological Game Theory," Working Papers 646, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  • Handle: RePEc:igi:igierp:646
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    File URL: ftp://ftp.igier.unibocconi.it/wp/2019/646.pdf
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    References listed on IDEAS

    as
    1. Battigalli, Pierpaolo & Charness, Gary & Dufwenberg, Martin, 2013. "Deception: The role of guilt," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 227-232.
    2. Attanasi, Giuseppe & Rimbaud, Claire & Villeval, Marie Claire, 2018. "Embezzlement and Guilt Aversion," IZA Discussion Papers 11956, Institute of Labor Economics (IZA).
    3. Chiara Aina & Pierpaolo Battigalli & Astrid Gamba, 2018. "Frustration and Anger in the Ultimatum Game: An Experiment," Working Papers 621, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    4. Balafoutas, Loukas, 2011. "Public beliefs and corruption in a repeated psychological game," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1-2), pages 51-59, April.
    5. George A. Akerlof, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, Oxford University Press, vol. 97(4), pages 543-569.
    6. Pierpaolo Battigalli & Roberto Corrao & Federico Sanna, 2019. "Epistemic Game Theory without Types Structures: An Application to Psychological Games," Working Papers 641, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    7. repec:wly:econjl:v:127:y:2017:i:602:p:873-895 is not listed on IDEAS
    8. Gani Aldashev & Georg Kirchsteiger & Alexander Sebald, 2017. "Assignment Procedure Biases in Randomised Policy Experiments," Economic Journal, Royal Economic Society, vol. 127(602), pages 873-895, June.
    9. David E. Bell, 1982. "Regret in Decision Making under Uncertainty," Operations Research, INFORMS, vol. 30(5), pages 961-981, October.
    10. Battigalli, Pierpaolo & Siniscalchi, Marciano, 1999. "Hierarchies of Conditional Beliefs and Interactive Epistemology in Dynamic Games," Journal of Economic Theory, Elsevier, vol. 88(1), pages 188-230, September.
    11. James Andreoni & B. Douglas Bernheim, 2009. "Social Image and the 50-50 Norm: A Theoretical and Experimental Analysis of Audience Effects," Econometrica, Econometric Society, vol. 77(5), pages 1607-1636, September.
    12. Pierpaolo Battigalli & Pietro Tebaldi, 2019. "Interactive epistemology in simple dynamic games with a continuum of strategies," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 68(3), pages 737-763, October.
    13. Giuseppe Attanasi & Pierpaolo Battigalli & Elena Manzoni & Rosemarie Nagel, 2018. "Belief-dependent Preferences and Reputation: Experimental Analysis of a Repeated Trust Game," Working Papers 622, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    14. David E. Bell, 1985. "Disappointment in Decision Making Under Uncertainty," Operations Research, INFORMS, vol. 33(1), pages 1-27, February.
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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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