The chapter reviews recent theoretical and empirical developments concerning the theory of team reasoning in game theoretic interactions.

We-thinking theories allow groups to deliberate as agents. They have been introduced into the economic domain for both theoretical and empirical reasons. Among the few scholars who have proposed formal approaches to illustrate how we-thinking arises, Bacharach offers one of the most developed theories from the game theoretic point of view. He presents a number of intuitions, not always mutually consistent and not fully developed. In this article, I propose a way to complete Bacharach’s theory, generalizing the interdependence hypothesis and (...) building on his intuition about vacillation. It is a simple model of vacillation between the I and we-modes of reasoning, as a way in which we-thinking can come to mind in the face of a decision problem. The vacillation model makes we-reasoning more easily usable in game theory. (shrink)

In his book, Understanding Institutions, Francesco Guala discusses two solutions to the problem of mindreading for coordination, the solution thinking approach proposed by Adam Morton and the team reasoning approach developed by Michael Bacharach, Robert Sugden, and Natalie Gold. I argue that the family resemblance between the two approaches is even stronger than Guala thinks.

Standard game theory cannot explain the selection of payoff-dominant outcomes that are best for all players in common-interest games. Theories of team reasoning can explain why such mutualistic cooperation is rational. They propose that teams can be agents and that individuals in teams can adopt a distinctive mode of reasoning that enables them to do their part in achieving Pareto-dominant outcomes. We show that it can be rational to play payoff-dominant outcomes, given that an agent group identifies. We compare team (...) reasoning to other theories that have been proposed to explain how people can achieve payoff-dominant outcomes, especially with respect to rationality. Some authors have hoped that it would be possible to develop an argument that it is rational to group identify. We identify some large—probably insuperable—problems with this project and sketch some more promising approaches, whereby the normativity of group identification rests on morality. (shrink)

Do responsibility voids exist? That is, are there situations in which the group is collectively morally responsible for some outcome although no member can be held individually morally responsible for it? To answer these questions, I draw a distinction between competitive and cooperative decision contexts based on the team-reasoning account of cooperation. Accordingly, I provide a reasoning-based analysis of cooperation, competition, moral responsibility, and, last, potential responsibility voids. I then argue that competitive decision contexts are free of responsibility voids. The (...) conditions for the existence of responsibility voids in cooperative decision contexts depend on the type of uncertainty the group faces, either external or coordination uncertainty. (shrink)

This paper takes up David Gauthier's most recent defense of the rationality of cooperation in prisoner's dilemmas. In that defense, Gauthier argues for a Pareto-optimizing theory of rational choice. According to Gauthier, rational action should sometimes aim at Pareto-optimization, and cooperation in prisoner's dilemmas is rational because it is Pareto-optimizing. I argue that Pareto-optimization cannot justify cooperation in the prisoner's dilemma in a manner that is also consistent with Gauthier's other desiderata. Either: the rationality of cooperation must derive from what (...) is beneficial for the group rather than what is beneficial for the individual, leaving the individual qua individual without any reason to cooperate, or Gauthier cannot explain why defecting in prisoner's dilemmas is not also rational. (shrink)

This paper investigates the influence that social ties can have on behavior. After defining the concept of social ties that we consider, we introduce an original model of social ties. The impact of such ties on social preferences is studied in a coordination game with outside option. We provide a detailed game theoretical analysis of this game while considering various types of players, i.e., self-interest maximizing, inequity averse, and fair agents. In addition to these approaches that require strategic reasoning in (...) order to reach some equilibrium, we also present an alternative hypothesis that relies on the concept of team reasoning. After having discussed the differences between the latter and our model of social ties, we show how an experiment can be designed so as to discriminate among the models presented in the paper. (shrink)

One of the conceptual limitations of the orthodox game theory is its inability to offer definitive theoretical predictions concerning the outcomes of noncooperative games with multiple rationalizable outcomes. This prompted the emergence of goal-directed theories of reasoning – the team reasoning theory and the theory of hypothetical bargaining. Both theories suggest that people resolve non-cooperative games by using a reasoning algorithm which allows them to identify mutually advantageous solutions of non-cooperative games. The primary aim of this thesis is to enrich (...) the current debate on goaldirected reasoning theories by studying the extent to which the principles of the bargaining theory can be used to formally characterize the concept of mutual advantage in a way which is compatible with some of the conceptually compelling principles of orthodox game theory, such as individual rationality, incentive compatibility, and non-comparability of decision-makers’ personal payoffs. I discuss two formal characterizations of the concept of mutual advantage derived from the aforementioned goal-directed reasoning theories: A measure of mutual advantage developed in collaboration with Jurgis Karpus, which is broadly in line with the notion of mutual advantage suggested by Sugden, and the benefit-equilibrating bargaining solution function, which is broadly in line with the principles underlying Conley and Wilkie’s solution for Pareto optimal point selection problems with finite choice sets. I discuss the formal properties of each solution, as well as its theoretical predictions in a number of games. I also explore each solution concept’s compatibility with orthodox game theory. I also discuss the limitations of the aforementioned goal-directed reasoning theories. I argue that each theory offers a compelling explanation of how a certain type of decision-maker identifies the mutually advantageous solutions of non-cooperative games, but neither of them offers a definitive answer to the question of how people coordinate their actions in non-cooperative social interactions. (shrink)

Philosophical accounts of collective intentionality typically rely on members to form a personal intention of sorts, viewed as a mental state. This tendency is opposed by recent economic literature on team-directed reasoning, which focuses on the reasoning process leading up to the formation of the members’ intentions. Our formal analysis bridges these paradigms and criticizes the team- directed reasoning account on two counts: first, team-directed reasoning is supposed to transcend traditional game and decision theory by adopting a certain collectivistic reasoning (...) method. However, we show that team-directed reasoning yields the same action recommendations as a certain I-mode we-intention type. Accordingly, an important part of we-mode reasoning can be reduced to I-mode reasoning with certain preferences. Second, contrary to the claims of team-directed-reasoning theorists, we refute that team-directed reasoning surpasses pro-group intentions in selecting cooperatively rational solutions. That is, in some scenarios team-directed reasoning fails to guarantee successful cooperation whereas pro-group intentions succeed in doing so. We therefore propose to revise team-directed reasoning and introduce a third we-intention type, called participatory intentions. We prove that participatory intentions guarantee that a best group action is performed whenever either team-directed reasoning or pro-group intentions do. (shrink)