Mindreading and endogenous beliefs in games

Team Reasoning and the Rational Choice of Payoff-Dominant Outcomes in Games

“…In economics, modellers have incorporated evidential reasoning by introducing action-dependent beliefs and allowing players to maximize expected utility conditional on their own action (Hammond 2009;Mandler 2007;Masel 2007). In a Bayesian model of belief formation, is possible to rationalise a player having beliefs about other players that depend her action (Board 2006;Larrouy and Lecouteux 2017). Never-the-less, the correlations between the players' actions are not causal correlations and ignoring the lack of causality is generally believed to be irrational (Lewis 1979;Gibbard and Harper 1978).…”

“…Rational action requires 'a proper kind of connection to desires, beliefs, and evidence' (Elster 1986, p. 2) and correlations that are not causal are not considered to be a proper kind of connection. Indeed, the majority of the economists modelling action-dependent beliefs intend to model a psychological phenomenon and are at best agnostic about its rationality (Hammond 2009;Masel 2007;Larrouy and Lecouteux 2017).…”

Bayesian game theorists and non-Bayesian players

“…To avoid this trivialization by Bayesianization, we must take the content of the priors in such cases to be the central unknowns of the theory, endogenous to it. (Bacharach and Hurley 1991, p.26) This does not necessarily require an important injection of psychology into game theory -in line with Brandenburger's (2014, p.xxii) suggestion of referring to the 'theory of mind' literature in cognitive sciences, Larrouy and Lecouteux (2017) for instance offer an axiomatization of simulation thinking which can explain the emergence of common belief of events in a similar vein than Friedell (1969) and Lewis (1969), and rationalise the coordination on focal points. Such a theory of belief formation would require investigating how players choose in 'large worlds' (in the sense of Savage), i.e.…”

“…Simulation' refers to a specific theory of mindreading, according to which the individual forms her beliefs about the other's actions by imagining what she would do if she were in the others' shoes. SeeGuala (2016, pp.89-101) andLarrouy and Lecouteux (2017) for a gametheoretic analysis of simulation thinking.10 SeeVanderschraaf and Sillari (2014) for a history of the concept and a review of the different formalisations.…”

An intersubjective model of agency for game theory

“…The question of how SPs and SP conjectures are explained relates to a long-standing debate whether game theorists should explain players' SPs in rational or psychological terms (e.g. Kadane and Larkey 1982a,b;Harsanyi 1982a,b;Aumann 1987;Morris 1995;Larrouy and Lecouteux 2017). This debate, however, is premised on an individualistic approach and without distinction between 'choiceworthy' and 'ISEP-maximizing' actions.…”