David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Jack Alan Reynolds
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Behavioral and Brain Sciences 26 (2):139-153 (2003)
Rational choice theory enjoys unprecedented popularity and influence in the behavioral and social sciences, but it generates intractable problems when applied to socially interactive decisions. In individual decisions, instrumental rationality is defined in terms of expected utility maximization. This becomes problematic in interactive decisions, when individuals have only partial control over the outcomes, because expected utility maximization is undefined in the absence of assumptions about how the other participants will behave. Game theory therefore incorporates not only rationality but also common knowledge assumptions, enabling players to anticipate their co-players' strategies. Under these assumptions, disparate anomalies emerge. Instrumental rationality, conventionally interpreted, fails to explain intuitively obvious features of human interaction, yields predictions starkly at variance with experimental findings, and breaks down completely in certain cases. In particular, focal point selection in pure coordination games is inexplicable, though it is easily achieved in practice; the intuitively compelling payoff-dominance principle lacks rational justification; rationality in social dilemmas is self-defeating; a key solution concept for cooperative coalition games is frequently inapplicable; and rational choice in certain sequential games generates contradictions. In experiments, human players behave more cooperatively and receive higher payoffs than strict rationality would permit. Orthodox conceptions of rationality are evidently internally deficient and inadequate for explaining human interaction. Psychological game theory, based on nonstandard assumptions, is required to solve these problems, and some suggestions along these lines have already been put forward. Key Words: backward induction; Centipede game; common knowledge; cooperation; epistemic reasoning; game theory; payoff dominance; pure coordination game; rational choice theory; social dilemma.
|Keywords||backward induction Centipede game common knowledge cooperation epistemic reasoning game theory payoff dominance pure coordination game rational choice theory social dilemma|
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Citations of this work BETA
Boudewijn de Bruin (2009). Overmathematisation in Game Theory: Pitting the Nash Equilibrium Refinement Programme Against the Epistemic Programme. Studies in History and Philosophy of Science Part A 40 (3):290-300.
Christopher Woodard (2011). Rationality and the Unit of Action. Review of Philosophy and Psychology 2 (2):261-277.
Paul Weirich (2007). Initiating Coordination. Philosophy of Science 74 (5):790-801.
Jun Zhang, Trey Hedden & Adrian Chia (2012). Perspective-Taking and Depth of Theory-of-Mind Reasoning in Sequential-Move Games. Cognitive Science 36 (3):560-573.
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