Against the orthodox view of the Nash equilibrium as “the embodiment of the idea that economic agents are rational” (Aumann, 1985, p 43), some theorists have proposed ‘non-classical’ concepts of rationality in games, arguing that rational agents should be capable of improving upon inefficient equilibrium outcomes. This paper considers some implications of these proposals for economic theory, by focusing on institutional design. I argue that revisionist concepts of rationality conflict with the constraint that institutions should be designed to be incentive-compatible, (...) that is, that they should implement social goals in equilibrium. To resolve this conflict, proponents of revisionist concepts face a choice between three options: (1) reject incentive compatibility as a general constraint, (2) deny that individuals interacting through the designed institutions are rational, or (3) accept that their concepts do not cover institutional design. I critically discuss these options and I argue that a more inclusive concept of rationality, e.g. the one provided by Robert Sugden’s version of team reasoning, holds the most promise for the non-classical project, yielding a novel argument for incentive compatibility as a general constraint. (shrink)

The game theoretic notion of best-response reasoning is sometimes criticized when its application produces multiple solutions of games, some of which seem less compelling than others. The recent development of the theory of team reasoning addresses this by suggesting that interacting players in games may sometimes reason as members of a team – a group of individuals who act together in the attainment of some common goal. A number of properties have been suggested for team-reasoning decision-makers’ goals to satisfy, but (...) a few formal representations have been discussed. In this paper we suggest a possible representation of these goals based on the notion of mutual advantage. We propose a method for measuring extents of individual and mutual advantage to the interacting decision-makers, and define team interests as the attainment of outcomes associated with maximum mutual advantage in the games they play. (shrink)

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)

This thesis defends utilitarianism: the view that as far as morality goes, one ought to choose the option which will result in the most overall well-being. Utilitarianism is widely rejected by philosophers today, largely because of a number of influential objections. In this thesis I deal with three of them. Each is found in Bernard Williams’s ‘A Critique of Utilitarianism’ (1973). The first is the Integrity Objection, an intervention that has been influential whilst being subject to a wide variety of (...) interpretations. In Chapter Two I give my interpretation of Williams’s Integrity objection; in Chapter Three I discuss one common response to it, and in Chapters Four and Five I give my own defence of utilitarianism against it. In Chapter Six I discuss a second objection: the problem of pre-emption. This problem is also found in Williams, but has received greater attention through the work of other authors in recent years. It suggests that utilitarianism is unable to deal with some of the modern world’s most pressing moral problems, and raises an internal tension between the twin utilitarian aims of making a difference and achieving the best outcomes. In Chapter Seven I discuss a third objection: that utilitarianism is insufficiently egalitarian. I find this claim to be unwarranted, in light of recent social science and philosophy. My responses to Williams’s objections draw upon resources from the socialist tradition – in particular, that tradition’s emphasis on the importance of social connections between individuals. Socialists have often been hostile to utilitarianism, in part for socialist-inflected versions of Williams’s objections. Thus, in responding to these objections I aim to demonstrate that socialist thought contains the means to defuse not only mainstream philosophy’s rejection of utilitarianism but also its own, and thus to re-open the possibilities for a productive engagement between the two traditions. (shrink)

This paper aims to assess current theoretical findings on the origin of coordination by salience and suggests a way to clarify the existing framework. The main concern is to reveal how different coordination mechanisms rely on specific epistemic aspects of reasoning. The paper highlights the fact that basic epistemic assumptions of theories diverge in a way that makes them essentially distinctive. Consequently, recommendations and predictions of the traditional views of coordination by salience are, in principle, based on the processes related (...) to the agent’s presumptions regarding the cognitive abilities of a co-player. This finding implies that we should consider these theories as complementary, and not competitive, explanations of the same phenomenon. -/- . (shrink)