Cognition and Behavior in Normal-Form Games: An Experimental Study

Costa‐Gomes, Miguel A.; Crawford, Vincent P.; Broseta, Bruno

doi:10.1111/1468-0262.00239

Cited by 684 publications

(413 citation statements)

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“…41 Experiments suggest that, on first impression, about one-fifth of players in an iterated game play the optimal equilibrium strategy, implying that the vast majority are unable to work through chains of decisions to eliminate the least rewarding strategies. 42 However, in repeated play about two-thirds learn their way to the equilibrium by repeatedly eliminating inferior strategies. 43 …”

Section: Strategic Interaction: Experienced Elites May Be Better At Pmentioning

confidence: 99%

The Cognitive Revolution and the Political Psychology of Elite Decision Making

2013

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Experimental evidence in cognitive psychology and behavioral economics is transforming the way political science scholars think about how humans make decisions in areas of high complexity, uncertainty, and risk. Nearly all those studies utilize convenience samples of university students, but in the real world political elites actually make most pivotal political decisions such as threatening war or changing the course of economic policy. Highly experienced elites are more likely to exhibit the attributes of rational decisionmaking; and over the last fifteen years a wealth of studies suggest that such elites are likely to be more skilled in strategic bargaining than samples with less germane experience. However, elites are also more likely to suffer overconfidence, which degrades decisionmaking skills. We illustrate implications for political science with a case study of crisis bargaining between the US and North Korea. Variations in the experience of US elite decision-makers between 2002 and 2006 plausibly explain the large shift in US crisis signaling better than other rival hypotheses such as "Iraq fatigue." Beyond crisis bargaining other major political science theories might benefit from attention to the attributes of individual decision-makers.F or decades, a cognitive revolution has been sweeping across the many fields of social science. The key insight from this revolution is that human decisionmaking is far from perfectly rational yet follows certain patterns that are relevant for economic and political behavior. Most of the evidence about human behavior has come from experimental studies on students and other subjects that are readily available to university professors in large numbers, at little cost. 1 Such studies have immediate relevance for understanding some kinds of political behavior, such as voting, that involves analogous populations. 2 Much of politics, however, hinges on the behavior of senior politicians and bureaucrats who run national governments and international organizations. Unfortunately, experienced elites are difficult to obtain as subjects because they are generally busy, wary of clinical poking, and skittish about revealing information about their decisionmaking processes and particular choices. 3 When elites do consent to such research, sample sizes are exceptionally small, making it hard to draw general inferences. While many political scientists do acknowledge that there are differences between how elites and novices reason, the literature generally downplays such differences.A small but growing number of experimental studies done mainly in the last two decades suggests that experienced elites act differently from the population of less experienced university students who have been the mainstay of research in political psychology, behavioral economics and related scholarship on the psychology of decision-making. 4 We make two arguments about the importance of this cognitive revolution for political science. First, on methods, when studying elite decision making it is importa...

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Section: Strategic Interaction: Experienced Elites May Be Better At Pmentioning

confidence: 99%

The Cognitive Revolution and the Political Psychology of Elite Decision Making

2013

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“…In this section, we investigate the effect of features on individual behavior first by applying the model presented in Costa-Gomes et al [37] to our data, then defining new types based on features, and finally comparing the performances of the two models. Costa-Gomes et al [37] identify nine types of strategic behavior, which summarize a wide range of possible decision rules a player can apply in a game: Altruistic (an agent aiming at the cell that maximizes the sum of his own and his opponent's payoff), Pessimistic (an agent choosing the strategy with the highest minimum payoff), Naïve (an agent picking the strategy with the highest average payoff, under the assumption that the opponent's choices are equally likely), Optimistic (a player aiming at the highest payoff for herself), L2 (an agent who best responds to a Naïve opponent), D1 (an agent who is able to single out a dominated strategy and then assign equal probability to the remaining choices of her opponent), D2 (an agent performing two rounds of iterated elimination of dominated strategies), Equilibrium (an agent who selects equilibrium strategies), Sophisticated (an agent who best responds to the probability distribution of his opponent's decisions).…”

Section: Analysis Of Individual Behaviormentioning

confidence: 99%

“…An alternative explanation may be that the focal point is chosen being the outcome that yields the highest payoff sum. Fairness-based explanations of out-of-equilibrium play are widespread, and behavioral models such as that of Costa-Gomes et al [37] include an "Altruistic" type, who systematically opts for the cell with the highest payoff sum. In order to test whether players select FP for this reason, in the following we analyze the relative attractiveness of the "fair" cell, defined as the one with the highest payoff sum.…”

Section: Pareto-efficiencymentioning

confidence: 99%

“…In order to apply the model to our data, we proceeded by classifying each choice according to the pre-defined set of strategic types defined in Costa-Gomes et al [37]. Out of the thirty payoff matrices we used, seventeen had to be excluded as the same strategic type would have selected multiple strategies.…”

mentioning

confidence: 99%

“…To test whether agents are influenced in their choices by features, we identify four feature-based types: Naïve (already defined in [37]), Focal/Naïve (F/N, an agent who chooses the Focal Point whenever possible and switches to the strategy with the highest average payoff otherwise), Focal/Equilibrium (F/E, an agent who chooses the Focal Point whenever possible and switches to the equilibrium strategy otherwise), and Naïve/Equilibrium (N/E, an agent who chooses the strategy with the highest average payoff when that strategy is riskless and switches to the equilibrium strategy otherwise). Table 6 reports the matrices of interest and each type's strategy.…”

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Feature-Based Choice and Similarity Perception in Normal-Form Games: An Experimental Study

Guida

Devetag

2013

Games

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In this paper, we claim that agents confronting with new interactive situations apply behavioral heuristics that drastically reduce the problem complexity either by neglecting the other players' incentives, or by restricting attention to subsets of "salient" outcomes. We postulate that these heuristics are sensitive to the manipulation of those features that can be modified without altering the (Nash) equilibrium structure of the game. We call these features "descriptive". We test experimentally the effect of these descriptive features on both choice behavior and cross-game similarity perception. Analysis of individual choices confirms our hypotheses, and suggests that non-equilibrium choices may derive from simplified mental models of the game structure, rather than from heterogeneous beliefs or limited iterative thinking. In addition, subjects tend to behave similarly in games sharing similar descriptive features, regardless of their strategic structure.Games 2013, 4 777 IntroductionEvery day, people face several decisions; most of them have risible consequences and can be dealt with almost automatically, only a few are crucial. Many of these decisions, however, are new, i.e., they have never been encountered before. The situations people face in their daily routine are in fact often similar to other situations previously encountered, but rarely identical. Then, how do people react to a strategic situation they have never encountered before? When do people perceive two situations as being similar?Behavioral game theory in the last decade has produced abundant experimental evidence in response to these questions, which in turn has informed empirically grounded modeling efforts. The enterprise has led to the development of new equilibrium concepts (e.g., Quantal Response Equilibrium [1], Cursed Equilibrium [2], to name a few) and of models that take on board individuals' limited reasoning abilities (i.e., the vast family of the level-k models [3][4][5]).Behavioral models of game playing, although relaxing the most implausible assumptions of standard game theory, still rely on the notion of strategic thinking, i.e., they assume that players form beliefs about other players (in other words, players have a mental model of the other player's strategic behavior) and try to maximize their utility given these beliefs (an exception is given by level-0 players in level-k models, who are assumed to choose a strategy randomly).Some of the available evidence, however, suggests a partly different picture of behavior in one-shot games, by pointing out that choice and belief might not be one the result of the other [6], by suggesting, more radically, that players may significantly underestimate their opponents' rationality [7], and finally, by hinting at the possibility that players may even act on the basis of a very simplified and/or incorrect model of the "true" strategic situation [8,9].In this paper, we submit that players in several occasions may apply choice heuristics that imply a drastic simplification of the original ...

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Behavioral Economics And Game Theory

Costa‐Gomes

2011

Wiley Encyclopedia of Operations Research and Management Science

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Game theory is a tool used to predict behavior in situations involving several decision makers. However, when people play games their behavior often shows systematic deviations from the theory's predictions. This article provides brief summaries of the different modeling approaches that attempt to account for such deviations. A common theme of these approaches is its close attention to a variety of empirically based phenomena that have been documented by psychologists. The result is a synthesis of theory and empirical evidence that is known as behavioral game theory.

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Cognition and Behavior in Normal-Form Games: An Experimental Study

Cited by 684 publications

References 26 publications

The Cognitive Revolution and the Political Psychology of Elite Decision Making

The Cognitive Revolution and the Political Psychology of Elite Decision Making

Feature-Based Choice and Similarity Perception in Normal-Form Games: An Experimental Study

Behavioral Economics And Game Theory

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