This paper presents an attempt to bridge the gap between logical and cognitive treatments of strategic reasoning in games. There have been extensive formal debates about the merits of the principle of backward induction among game theorists and logicians. Experimental economists and psychologists have shown that human subjects, perhaps due to their bounded resources, do not always follow the backward induction strategy, leading to unexpected outcomes. Recently, based on an eye-tracking study, it has turned out that even human subjects who (...) produce the outwardly correct ‘backward induction answer’ use a different internal reasoning strategy to achieve it. The paper presents a formal language to represent different strategies on a finer-grained level than was possible before. The language and its semantics help to precisely distinguish different cognitive reasoning strategies, that can then be tested on the basis of computational cognitive models and experiments with human subjects. The syntactic framework of the formal system provides a generic way of constructing computational cognitive models of the participants of the Marble Drop game. (shrink)

Theory-of-mind (ToM) involves modeling an individual’s mental states to plan one’s action and to anticipate others’ actions through recursive reasoning that may be myopic (with limited recursion) or predictive (with full recursion). ToM recursion was examined using a series of two-player, sequential-move matrix games with a maximum of three steps. Participants were assigned the role of Player I, controlling the initial and the last step, or of Player II, controlling the second step. Appropriate for the assigned role, participants either anticipated (...) or planned Player II’s strategy at the second step, and then determined Player I’s optimal strategy at the first step. Participants more readily used predictive reasoning as Player II (i.e., planning one’s own move) than as Player I (i.e., anticipating an opponent’s move), although they did not differ when translating reasoning outcome about the second step to optimal action in the first step. Perspective-taking influenced likelihood of predictive reasoning, but it did not affect the rate at which participants acquired it during the experimental block. We conclude that the depth of ToM recursion (related to perspective-taking mechanisms) and rational application of belief–desire to action (instrumental rationality) constitute separate cognitive processes in ToM reasoning. (shrink)

This paper suggests that Nash equilibrium can be interpreted as a conceptual tool for addressing comparative-statics issues on an aggregate level. Together with additional assumptions, Nash equilibrium helps generate testable predictions about changes or differences of behavior induced by changes or differences of exogenous variables. However, Nash-equilibrium behavior, as such, is not subject to empirical testing. Instead, widespread and persistent behavior is modeled as a Nash equilibrium by assumption. The paper argues that this interpretation is in line with the traditional (...) use of an equilibrium concept in price theory. The suggested interpretation is illustrated with the model of public-goods provision. The paper compares this interpretation of Nash equilibrium with other interpretations and discusses its limits. (shrink)

This paper examines two strands of literature regarding economic models of cooperation. First, payoff transformation theories assume that people may not be exclusively motivated by self-interest, but also care about equality and fairness. Second, team reasoning theorists assume that people might reason from the perspective of the team, rather than an individualistic perspective. Can these two theories be unified? In contrast to the consensus among team reasoning theorists, I argue that team reasoning can be viewed as a particular type of (...) payoff transformation. However, I also demonstrate that many payoff transformations yield actions that team reasoning rules out. (shrink)

This paper is a partial review of the literature on ‘social preferences'. There are empirical findings that convincingly demonstrate the existence of social preferences, but there are also studies that indicate their fragility. So how robust are social preferences, and how exactly are they context dependent? One of the most promising insights from the literature, in my view, is an equilibrium explanation of mutually referring conditional social preferences and expectations. I use this concept of equilibrium, summarized by means of a (...) figure, to discuss a range of empirical studies. Where appropriate, I also briefly discuss a couple of insights from the (mostly parallel) evolutionary literature about cooperation. A concrete case of the Orma in Kenya will be used as a motivating example in the beginning. (shrink)

How do rational agents coordinate in a single-stage, noncooperative game? Common knowledge of the payoff matrix and of each player's utility maximization among his strategies does not suffice. This paper argues that utility maximization among intentions and then acts generates coordination yielding a payoff-dominant Nash equilibrium. ‡I thank the audience at my paper's presentation at the 2006 PSA meeting for many insightful points. †To contact the author, please write to: Philosophy Department, University of Missouri, Columbia, MO 65211; e-mail: [email protected].

I argue that an ecologically distributed conception of instrumental rationality can and should be extended to a socially distributed conception of instrumental rationality in social environments. The argument proceeds by showing that the assumption of exogenously fixed units of activity cannot be justified; different units of activity are possible and some are better means to independently given ends than others, in various circumstances. An important social heuristic, the mirror heuristic, enables the flexible formation of units of activity in game theoretic (...) situations, including collective units where these are instrumentally effective. In effect, the mirror heuristic makes the formation of units of activity endogenous to instrumental rationality. Moreover, the mirror heuristic is a conditional metaheuristic, which depends on mind reading of the heuristics of other players rather than on predictions of their behavior. Such mind reading can be regarded as emerging from an arms race between behavioral mimicry and ever smarter behavior reading. Even though unilateral mind reading may have benefits, the mirror metaheuristic illustrates that mutual mind reading has distinctive functions in responding to the challenges of social complexity. If simple heuristics can make us smart in the right environments, then social heuristics can make us smarter still. (shrink)

This paper examines a special kind of social preference, namely a preference to do one's part in a mixed-motive setting because the other party expects one to do so. I understand this expectation-based preference as a basic reactive attitude. Given this, and the fact that expectations in these circumstances are likely to be based on other people's preferences, I argue that in cooperation a special kind of equilibrium ensues, which I call a loop, with people's preferences and expectations mutually cross-referring. (...) As with a Lewis-norm, the loop can get started in a variety of ways. It is self-sustaining in the sense that people with social preferences have sufficient reason not to deviate. (shrink)

This paper examines the idea of an extended unit of action, which is the idea that the reasons for or against an individual action can depend on the qualities of a larger pattern of action of which it is a part. One concept of joint action is that the unit of action can be extended in this sense. But the idea of an extended unit of action is surprisingly minimal in its commitments. The paper argues for this conclusion by examining (...) uses of the idea of an extended unit of action in four theoretical contexts. It also explains why the idea of an extended unit of action need not involve magical thinking, and discusses possible replies to an objection based on a worry about recklessness. (shrink)

Social interaction is both ubiquitous and central to understanding human behavior. Such interactions depend, we argue, on shared intentionality: the parties must form a common understanding of an ambiguous interaction. Yet how can shared intentionality arise? Many well-known accounts of social cognition, including those involving “mind-reading,” typically fall into circularity and/or regress. For example, A’s beliefs and behavior may depend on her prediction of B’s beliefs and behavior, but B’s beliefs and behavior depend in turn on her prediction of A’s (...) beliefs and behavior. One possibility is to embrace circularity and take shared intentionality as imposing consistency conditions on beliefs and behavior, but typically there are many possible solutions and no clear criteria for choosing between them. We argue that addressing these challenges requires some form of we-reasoning, but that this raises the puzzle of how the collective agent arises from the individual agents. This puzzle can be solved by proposing that the will of the collective agent arises from a simulated process of bargaining: agents must infer what they would agree, were they able to communicate. This model explains how, and which, shared intentions are formed. We also propose that such “virtual bargaining” may be fundamental to understanding social interactions. (shrink)

Conflict can profoundly affect individuals and their groups. Oftentimes, conflict involves a clash between one side seeking change and increased gains through victory and the other side defending the status quo and protecting against loss and defeat. However, theory and empirical research largely neglected these conflicts between attackers and defenders, and the strategic, social, and psychological consequences of attack and defense remain poorly understood. To fill this void, we model (1) the clashing of attack and defense as games of strategy (...) and reveal that (2) attack benefits from mismatching its target's level of defense, whereas defense benefits from matching the attacker's competitiveness. This suggests that (3) attack recruits neuroendocrine pathways underlying behavioral activation and overconfidence, whereas defense invokes neural networks for behavioral inhibition, vigilant scanning, and hostile attributions; and that (4) people invest less in attack than defense, and attack often fails. Finally, we propose that (5) in intergroup conflict, out-group attack needs institutional arrangements that motivate and coordinate collective action, whereas in-group defense benefits from endogenously emerging in-group identification. We discuss how games of attack and defense may have shaped human capacities for prosociality and aggression, and how third parties can regulate such conflicts and reduce their waste. (shrink)

In a recent article in this journal, Duijf claims to have proved that team reasoning can be viewed as a payoff transformation. His formalization mimics team reasoning but ignores its essential agency switch. The possibility of such a payoff transformation was never in doubt, does not imply that team reasoning can be viewed as a payoff transformation, and makes no sense in a game in which payoffs represent players’ utilities. A theorem is proved here that a simpler and more intuitive (...) payoff transformation can mimic any theory that predicts what strategies players will choose in a well-defined game. (shrink)

Satisficing is a central concept in both individual and social multiagent decision making. In this paper we first extend the notion of satisficing by formally modeling the tradeoff between costs and decision failure. Second, we extend this notion of “neo”-satisficing into the context of social or multiagent decision making and interaction, and model the social conditioning of preferences in a satisficing framework.

The paper argues that the Nash Equilibrium Refinement Programme was less successful than its competitor, the Epistemic Programme. The prime criterion of success is the extent to which the programmes were able to reach the key objective guiding non-cooperative game theory for much of the twentieth century, namely, to develop a complete characterisation of the strategic rationality of economic agents in the form of the ultimate solution concept for any normal form and extensive game. The paper explains this in terms (...) of unjustified degrees of mathematisation in Nash Equilibrium Refinement Programme. While this programme’s mathematical models were often inspired by purely mathematical concerns rather than the economic phenomena they were intended to model, the Epistemic Programme’s models were developed with a keen eye to the role beliefs and desires play in strategic interaction between rational economic agents playing games; that is, their interactive epistemology. The Epistemic Programme succeeded in developing mathematical models formalising aspects of strategic interaction that remained implicit in the Nash Equilibrium Refinement Programme owing to an unjustified degree of mathematisation. As a result, the Epistemic Programme is the more successful theory.Keywords: Epistemic Programme; Game theory; Interactive epistemology; Mathematisation; Nash equilibrium. (shrink)