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Theory of Games and Economic Behavior
Princeton University Press (1944)
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The Internet and social media have opened niches for political exploitation of human dispositions to hyperalarmed states that amplify perceived threats relative to their objective probabilities of occurrence. Researchers should aim to observe the dynamic “ramping up” of security threat mechanisms under controlled experimental conditions. Such research necessarily begins from a clear model of standard baseline states, and should involve adding treatments to established experimental protocols developed by experimental economists. We review these protocols, which allow for joint estimation of risk (...) 

Decision theorists have attempted to accommodate several violations of decision theory’s axiomatic requirements by modifying how agents’ choice options are individuated and formally represented. In recent years, prominent authors have worried that these modifications threaten to trivialize decision theory, make the theory unfalsifiable, impose overdemanding requirements on decision theorists, and hamper decision theory’s internal coherence. In this paper, I draw on leading descriptive and normative works in contemporary decision theory to address these prominent concerns. In doing so, I articulate and (...) 

This book concerns the foundations of epistemic modality. I examine the nature of epistemic modality, when the modal operator is interpreted as concerning both apriority and conceivability, as well as states of knowledge and belief. The book demonstrates how epistemic modality relates to the computational theory of mind; metaphysical modality; deontic modality; the types of mathematical modality; to the epistemic status of undecidable propositions and abstraction principles in the philosophy of mathematics; to the aprioriaposteriori distinction; to the modal profile of (...) 

We are today agents of a peculiar reality, the global network or the system for automated information production. Our condition in the global network is that of agents of the real, since we all contribute to the coproduction of this everevolving process. Nevertheless, I will argue, this reality is but the effect of the adoption of a notion of instrumental pragmatic rationality which denies the existence of any other possible reality as the actualization of different determinations of Reason. While following (...) 

: Autonomous driving systems promise important changes for future of transport, primarily through the reduction of road accidents. However, ethical concerns, in particular, two central issues, will be key to their successful development. First, situations of risk that involve inevitable harm to passengers and/or bystanders, in which some individuals must be sacrificed for the benefit of others. Secondly, and identification responsible parties and liabilities in the event of an accident. Our work addresses the first of these ethical problems. We are (...) 

In this paper I will present an analysis of the impact that the notion of “bounded rationality”, introduced by Herbert Simon in his book “Administrative Behavior”, produced in the field of Artificial Intelligence (AI). In particular, by focusing on the field of Automated Decision Making (ADM), I will show how the introduction of the cognitive dimension into the study of choice of a rational (natural) agent, indirectly determined  in the AI field  the development of a line of research (...) 



Jazz band is a 3 player superadditive game in characteristic function form. Three players have to divide the payoff they can get, while being in a grand coalition, provided their individual and duo coalitions payoffs are known. Assumptions of individual and collective rationality lead to the notion of the core of the game. We discuss offers that cannot readily be refused [OCRR] as the solutions of the game in case of an empty core, when duo coalitions are the best options (...) 

The principle that rational agents should maximize expected utility or choiceworthiness is intuitively plausible in many ordinary cases of decisionmaking under uncertainty. But it is less plausible in cases of extreme, lowprobability risk (like Pascal's Mugging), and intolerably paradoxical in cases like the St. Petersburg and Pasadena games. In this paper I show that, under certain conditions, stochastic dominance reasoning can capture most of the plausible implications of expectational reasoning while avoiding most of its pitfalls. Specifically, given sufficient background uncertainty (...) 

This paper presents a new solution to the problems for orthodox decision theory posed by the Pasadena game and its relatives. I argue that a key question raised by consideration of these gambles is whether evaluative compositionality (as I term it) is a requirement of rationality: is the value that an ideally rational agent places on a gamble determined by the values that she places on its possible outcomes, together with their mode of composition into the gamble (i.e. the probabilities (...) 

In this paper I discuss the kinds of idealisations invoked in normative theories—logic, epistemology, and decision theory. I argue that very often the socalled norms of rationality are in fact mere idealisations invoked to make life easier. As such, these idealisations are not too different from various idealisations employed in scientific modelling. Examples of the latter include: fluids are incompressible (in fluid mechanics), growth rates are constant (in population ecology), and the gravitational influence of distant bodies can be ignored (in (...) 

There are currently two robust traditions in philosophy dealing with doxastic attitudes: the tradition that is concerned primarily with allornothing belief, and the tradition that is concerned primarily with degree of belief or credence. This paper concerns the relationship between belief and credence for a rational agent, and is directed at those who may have hoped that the notion of belief can either be reduced to credence or eliminated altogether when characterizing the norms governing ideally rational agents. It presents a (...) 

In this dissertation, I construct scientifically and practically adequate moral analogs of cognitive heuristics and biases. Cognitive heuristics are reasoning “shortcuts” that are efficient but flawed. Such flaws yield systematic judgment errors—i.e., cognitive biases. For example, the availability heuristic infers an event’s probability by seeing how easy it is to recall similar events. Since dramatic events, such as airplane crashes, are disproportionately easy to recall, this heuristic explains systematic overestimations of their probability (availability bias). The research program on cognitive heuristics (...) 



Decisionmaking typically requires judgments about causal relations: we need to know the causal effects of our actions and the causal relevance of various environmental factors. We investigate how several individuals' causal judgments can be aggregated into collective causal judgments. First, we consider the aggregation of causal judgments via the aggregation of probabilistic judgments, and identify the limitations of this approach. We then explore the possibility of aggregating causal judgments independently of probabilistic ones. Formally, we introduce the problem of causalnetwork aggregation. (...) 

The desirability of what actually occurs is often influenced by what could have been. Preferences based on such value dependencies between actual and counterfactual outcomes generate a class of problems for orthodox decision theory, the bestknown perhaps being the socalled Allais Paradox. In this paper we solve these problems by extending Richard Jeffrey's decision theory to counterfactual prospects, using a multidimensional possibleworld semantics for conditionals, and showing that preferences that are sensitive to counterfactual considerations can still be desirability maximising. We (...) 

'Value' is a central concept in all of the principles and methods applied in Lean Construction, but it is rather difficult to provide a precise definition of the term. The problem lies in the word value itself: its ambiguity and vagueness make theorization difficult. This paper investigates the philosophical concept of value from a Lean Construction perspective. Several elements that contribute to value are considered, including objective elements such as waste reduction, quality, price and functionality, and more subjective elements such (...) 

Traditionally, epistemologists have distinguished between epistemic and pragmatic goals. In so doing, they presume that much of game theory is irrelevant to epistemic enterprises. I will show that this is a mistake. Even if we restrict attention to purely epistemic motivations, members of epistemic groups will face a multitude of strategic choices. I illustrate several contexts where individuals who are concerned solely with the discovery of truth will nonetheless face difficult game theoretic problems. Examples of purely epistemic coordination problems and (...) 

The answer in a nutshell is: Yes, five years ago, but nobody has noticed. Nobody noticed because the majority of social scientists subscribe to one of the following views: (1) the ‘anomalous’ behaviour observed in standard prisoner’s dilemma or ultimatum game experiments has refuted standard game theory a long time ago; (2) game theory is flexible enough to accommodate any observed choices by ‘refining’ players’ preferences; or (3) it is just a piece of pure mathematics (a tautology). None of these (...) 

This dissertation concerns the foundations of epistemic modality. I examine the nature of epistemic modality, when the modal operator is interpreted as concerning both apriority and conceivability, as well as states of knowledge and belief. The dissertation demonstrates how phenomenal consciousness and gradational possibleworlds models in Bayesian perceptual psychology relate to epistemic modal space. The dissertation demonstrates, then, how epistemic modality relates to the computational theory of mind; metaphysical modality; deontic modality; logical modality; the types of mathematical modality; to the (...) 

in Undetermined Table d’Hôte Ingar Brinck: Investigating the development of creativity: The Sahlin hypothesis 7 Linus Broström: Known unknowns and protosecondpersonal address in photographic art 25 Johan Brännmark: Critical moral thinking without moral theory 33 Martin Edman: Vad är ett missförhållande? 43 Pascal Engel: Rambling on the value of truth 51 Peter Gärdenfors: Ambiguity in decision making and the fear of being fooled 75 Göran Hermerén: NIPT: Ethical aspects 89 Mats Johansson: Roboethics: What problems should be addressed and why? 103 (...) 

Communication and content presents a comprehensive and foundational account of meaning based on new versions of situation theory and game theory. The literal and implied meanings of an utterance are derived from first principles assuming little more than the partial rationality of interacting agents. New analyses of a number of diverse phenomena – a wide notion of ambiguity and content encompassing phonetics, syntax, semantics, pragmatics, and beyond, vagueness, convention and conventional meaning, indeterminacy, universality, the role of truth in communication, semantic (...) 

My dissertation explores the ways in which Rudolf Carnap sought to make philosophy scientific by further developing recent interpretive efforts to explain Carnap’s mature philosophical work as a form of engineering. It does this by looking in detail at his philosophical practice in his most sustained mature project, his work on pure and applied inductive logic. I, first, specify the sort of engineering Carnap is engaged in as involving an engineering design problem and then draw out the complications of design (...) 

In his classic book “the Foundations of Statistics” Savage developed a formal system of rational decision making. The system is based on (i) a set of possible states of the world, (ii) a set of consequences, (iii) a set of acts, which are functions from states to consequences, and (iv) a preference relation over the acts, which represents the preferences of an idealized rational agent. The goal and the culmination of the enterprise is a representation theorem: Any preference relation that (...) 

Epistemic decision theory (EDT) employs the mathematical tools of rational choice theory to justify epistemic norms, including probabilism, conditionalization, and the Principal Principle, among others. Practitioners of EDT endorse two theses: (1) epistemic value is distinct from subjective preference, and (2) belief and epistemic value can be numerically quantified. We argue the first thesis, which we call epistemic puritanism, undermines the second. 



Optimality Theory catches on in linguistics, first in phonology, then in syntax, and recently also at the semantics/pragmatics interface. In this paper we point to some parallels between principles employed in optimality theoretic interpretation, and notions from the wellestablished field of Game Theory. Optimality theoretic interpretation can be defined as what we call an ‘interpretation game’, and optimality itself can be viewed as a solution concept for a game. More in particular, optimality can be characterized in terms of the gametheoretical (...) 



The overall objective of this article is to demonstrate that in applied ethics, certain problems related to decisionmaking are easier to resolve using conceptual tools borrowed from mathematics than by using philosophical ethics theories, such as classical utilitarianism. With the help of a case study, the first part of the article will attempt to point out that if an agent bases his reasoning on the verbal and purely qualitative concepts of the classical utilitarian theory, he will find himself confronting “undecidable” (...) 



We present a rational model of consumer choice, which can also serve as a behavioral model. The central construct is λ\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{69pt} \begin{document}$$\lambda $$\end{document}, the marginal utility of money, derived from the consumer’s restoflife problem. It provides a simple criterion for choosing a consumption bundle in a separable consumption problem. We derive a robust approximation of λ\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{69pt} \begin{document}$$\lambda $$\end{document} and show how to incorporate liquidity constraints, (...) 

Nash is famous for many inventions, but it is less known that he, simultaneously with Marschak, also was the first to axiomatize expected utility for risk. In particular, these authors were the first to state the independence condition, a condition that should have been but was not stated by von Neumann and Morgenstern. Marschak’s paper resulted from interactions with several people at the Cowles Commission. We document unique letters and personal communications with Nash, Samuelson, Arrow, Dalkey, and others, making plausible (...) 

In a recent Analysis piece, John Shand (2014) argues that the Predictive Theory of Mind provides a unique explanation for why one cannot play chess against oneself. On the basis of this purported explanatory power, Shand concludes that we have an extra reason to believe that PTM is correct. In this reply, we first rectify the claim that one cannot play chess against oneself; then we move on to argue that even if this were the case, Shand’s argument does not (...) 



The impossibility theorem of Dekel, Lipman and Rustichini has been thought to demonstrate that standard statespace models cannot be used to represent unawareness. We first show that Dekel, Lipman and Rustichini do not establish this claim. We then distinguish three notions of awareness, and argue that although one of them may not be adequately modeled using standard state spaces, there is no reason to think that standard state spaces cannot provide models of the other two notions. In fact, standard space (...) 

This article discusses the set of Harsanyi payoff vectors of a cooperative TUgame, also known as the Selectope. We reconsider some results on Harsanyi payoff vectors within a more general framework. First, an intuitive approach is used, showing that the set of Harsanyi payoff vectors is the core of an associated convex game. Next, the set of individual rational Harsanyi payoff vectors, the Harsanyi imputations in short, is considered. Existence conditions are provided, and if nonempty, we provide a description as (...) 

Nash equilibria with identical supports are compared for bimatrix games that are different with respect to the risk aversion of player 2. For equilibria in 2× 2bimatrix games and for equilibria with efficient supports in coordination games it is established for which cases increased risk aversion of player 2 benefits or hurts player 2. 

Theoryofmind (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 twoplayer, sequentialmove 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 (...) 

The value of rational choice theory for the social sciences has long been contested. It is argued here that, in the debate over its role, it is necessary to distinguish between claims that people maximise manifest payoffs, and claims that people maximise their utility. The former version has been falsified. The latter is unfalsifiable, because utility cannot be observed. In principle, utility maximisation can be adapted to fit any form of behaviour, including the behaviour of nonhuman organisms. Allegedly 'inconsistent' behaviour (...) 

In this paper the use of mathematics in economics will be discussed, by comparing two approaches to mathematics, a Cartesian approach, and a Newtonian approach. I will argue that while mainstream economics is underpinned by a Cartesian approach which led to a divorce between mathematics and reality, the contributions of key authors of the Cambridge tradition, like Marshall, Keynes and Sraffa, are characterised by a Newtonian approach to mathematics, where mathematics is aimed at a study of reality. Marshall was influenced (...) 

A substantial body of empirical evidence shows that individuals overweight extreme events and act in conflict with the expected utility theory. These findings were the primary motivation behind the development of a rankdependent utility theory for choice under uncertainty. The purpose of this paper is to demonstrate that some simple empirical rules of thumb for choice under uncertainty are consistent with the rankdependent utility theory. 

Classical (Bayesian) probability (CP) theory has led to an influential research tradition for modeling cognitive processes. Cognitive scientists have been trained to work with CP principles for so long that it is hard even to imagine alternative ways to formalize probabilities. However, in physics, quantum probability (QP) theory has been the dominant probabilistic approach for nearly 100 years. Could QP theory provide us with any advantages in cognitive modeling as well? Note first that both CP and QP theory share the (...) 









In Rawls’ influential social contract approach to distributive justice, the fair income distribution is the one that an individual would choose behind a veil of ignorance. Harsanyi treated this situation as a decision under risk and arrived at utilitarianism using expected utility theory. This paper investigates the implications of applying cumulative prospect theory instead, which better describes behavior under risk. I find that the specific type of inequality in bottomheavy rightskewed income distributions, which includes the lognormal income distribution, could be (...) 

According to the traditional Bayesian view of credence, its structure is that of precise probability, its objects are descriptive propositions about the empirical world, and its dynamics are given by conditionalization. Each of the three essays that make up this thesis deals with a different variation on this traditional picture. The first variation replaces precise probability with sets of probabilities. The resulting imprecise Bayesianism is sometimes motivated on the grounds that our beliefs should not be more precise than the evidence (...) 

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 (...) 