Psychological games and sequential rationality

Geanakoplos, John; Pearce, David; Stacchetti, Ennio

doi:10.1016/0899-8256(89)90005-5

Cited by 827 publications

(502 citation statements)

References 7 publications

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“…Another key difference is that models of guilt-aversion posit that preferences depend directly on beliefs and hence are based on the Psychological Game Theory of Geanakoplos et al (1989). This is not the case in our model: People care about being approved/disapproved, and their expectations in this regard affect expected utility.…”

Section: Disapproval-aversion: a Toy Modelmentioning

confidence: 63%

On approval and disapproval: Theory and experiments

López-Pérez

Vorsatz

2010

Journal of Economic Psychology

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Prior studies have shown that selfish behavior is reduced when co-players have the opportunity to approve/disapprove a player's choice, even if that has no consequences on the player's material payoff. Using a prisoner's dilemma, we experimentally study the causes of this phenomenon, which seems crucial to understand compliance with social norms.Our data is consistent with a model based on the assumption that people feel badly if they expect to be disapproved by others. Furthermore, we find suggestive evidence in line with the following assumptions: (i) People become more aware about the others opinion if feedback is available, and (ii) even if the feedback is ex post and has no effect on their ex ante expectations about disapproval, people prefer not to receive negative feedback.

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Section: Disapproval-aversion: a Toy Modelmentioning

confidence: 63%

On approval and disapproval: Theory and experiments

López-Pérez

Vorsatz

2010

Journal of Economic Psychology

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“…Because workers' preferences in this extended model depend on their expectations (both of the moves of Nature and of the players' strategies), this is not strictly speaking a conventional game, but rather an example of an extensiveform "psychological game" (after Geanakoplos et al (1989)). 14 In general, extending standard game-theoretic solution concepts to this class of games may involve subtleties.…”

Section: Appendix C: Reference-dependent Worker Preferencesmentioning

confidence: 99%

Reference Dependence and Labor Market Fluctuations

Eliaz

Spiegler

2014

NBER Macroeconomics Annual

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We incorporate reference-dependent worker behavior into a search-matching model of the labor market, in which firms have all the bargaining power and productivity follows a log-linear AR(1) process. Motivated by Akerlof (1982) and Bewley (1999), we assume that existing workers' output falls stochastically from its normal level when their wage falls below a "reference point", which (following Kőszegi and Rabin (2006)) is equal to their lagged-expected wage. We formulate the model game-theoretically and show that it has a unique subgame perfect equilibrium that exhibits the following properties: existing workers experience downward wage rigidity, as well as destruction of output following negative shocks due to layoffs or loss of morale; newly hired workers earn relatively flexible wages, but not as much as in the benchmark without reference dependence; market tightness is more volatile than under this benchmark. We relate these findings to the debate over the "Shimer puzzle" (Shimer (2005)).

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“…Symmetrically the entrepreneur gains additional utility form acting according to the ideology if he believes that the worker does the same and (he believes that ) the worker also believes that he acts according to the ideology -that is by choosing LC whether he believes that (LW,LC) is the current outcome. Following the theory of psychological games (Geanakoplos et al 1989), I hypothesise that there exists a component of the utility functions of the players, defined on their strategy choices, which depends on their beliefs about their reciprocal choices.…”

Section: Hypothetical Game Constitutional Ideology and Its Motivatiomentioning

confidence: 99%

“…My results are clearly indebted to that strand of economic literature that sees expectations and beliefs about strategic behaviour as directly entering the utility functions of the players (utilities depend strictly on what the players believe about the conformity of other players to given strategy combinations) so that beliefs contribute to create an entirely new set of equilibrium points of the relevant game (Geanakoplos et al 1989, Rabin 1993, Bernheim 1994, Sugden 1998a, 1998b. A first difference with many of these contributions can be seen in that I do not attach normative force to common mutual expectations per se.…”

mentioning

confidence: 99%

The Efficiency of the Non-profit Enterprise: Constitutional Ideology, Conformist Preferences and Reputation

Sacconi¹

2004

Studies in Economic Ethics and Philosophy

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Psychological games and sequential rationality

Cited by 827 publications

References 7 publications

On approval and disapproval: Theory and experiments

On approval and disapproval: Theory and experiments

Reference Dependence and Labor Market Fluctuations

The Efficiency of the Non-profit Enterprise: Constitutional Ideology, Conformist Preferences and Reputation

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