Behavioral and Brain Sciences 26 (2):139-153 (2003)
|Abstract||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||No keywords specified (fix it)|
|Categories||categorize this paper)|
|Through your library||Configure|
Similar books and articles
Maarten C. W. Janssen (2001). Rationalizing Focal Points. Theory and Decision 50 (2):119-148.
Boudewijn de Bruin (2008). Common Knowledge of Rationality in Extensive Games. Notre Dame Journal of Formal Logic 49 (3):261-280.
Andrew M. Colman (2007). Love is Not Enough: Other-Regarding Preferences Cannot Explain Payoff Dominance in Game Theory. Behavioral and Brain Sciences 30 (1):22-23.
Richard Schuster (2003). Why Not Go All the Way. Behavioral and Brain Sciences 26 (2):173-174.
Daniel M. Hausman (2003). Rational Belief and Social Interaction. Behavioral and Brain Sciences 26 (2):163-164.
John Broome & Wlodek Rabinowicz (1999). Backwards Induction in the Centipede Game. Analysis 59 (264):237–242.
Andrew M. Colman & Michael Bacharach (1997). Payoff Dominance and the Stackelberg Heuristic. Theory and Decision 43 (1):1-19.
Martin Bunzl (2002). Evolutionary Games Without Rationality? Philosophy of the Social Sciences 32 (3):365-378.
Andrew M. Colman (2003). Beyond Rationality: Rigor Without Mortis in Game Theory. Behavioral and Brain Sciences 26 (2):180-192.
Added to index2009-01-28
Total downloads16 ( #81,741 of 722,863 )
Recent downloads (6 months)1 ( #60,917 of 722,863 )
How can I increase my downloads?