Game theory is a branch of economics that uses powerful mathematical models to predict what agents ought to do when interacting with other agents strategically. Bounded rationality is a sub-field of game theory that sets out to explain why, in some interesting cases, people don't act according their utility maximizing strategies, as described by game theory. Interactive Epistemology is formal tool used by Game Theorists and computer scientists to model interactive cases of (...) knowledge. This interesting and useful tool has been previously ignored by philosophers. I'd like to introduce philosophers to interactive epistemology. After doing so, I'll go on to describe the way I've used this powerful formal tool in my own research, by giving some arguments about Bounded Epistemology, which is an analogue of Bounded Rationality, and, if I'm right, is explainable according to many, but not all, of the same models. Doing so, however, requires first setting out and explaining many of these concepts more fully. (shrink)

Contents. Introduction. 1. Preliminaries. 2. Normal Form Games. 3. Extensive Games. 4. Applications of Game Theory. 5. The Methodology of Game Theory. Conclusion. Appendix. Bibliography. Index. Does game theory—the mathematical theory of strategic interaction—provide genuine explanations of human behaviour? Can game theory be used in economic consultancy or other normative contexts? Explaining Games: The Epistemic Programme in Game Theory—the first monograph on the philosophy of game theory—is an attempt to combine insights from epistemic logic (...) and the philosophy of science to investigate the applicability of game theory in such fields as economics, philosophy and strategic consultancy. I prove new mathematical theorems about the beliefs, desires and rationality principles of individual human beings, and explore in detail the logical form of game theory as it is used in explanatory and normative contexts. I argue that game theory reduces to rational choice theory if used as an explanatory device, and that game theory is nonsensical if used as a normative device. A provocative account of the history of game theory reveals that this is not bad news for all of game theory, though. Two central research programmes in game theory tried to find the ultimate characterisation of strategic interaction between rational agents. Yet, while the Nash Equilibrium Refinement Programme has done badly thanks to such research habits as overmathematisation, model-tinkering and introversion, the Epistemic Programme, I argue, has been rather successful in achieving this aim. "The 'epistemic' approach to game theory has emerged over the past twenty-five years. What is this approach? How does it differ from the conventional equilibrium-based approach to game theory? What have been its strengths and weaknesses to date? To find out, read this comprehensive and excellently written account". Adam Brandenburger, J. P. Valles Professor of Business Economics and Strategy, Stern School of Business, New York University "Reading Boudewijn de Bruin's book should be rewarding both for game theorists interested in the conceptual foundations of their discipline and for philosophers who want to learn more about formal analysis of strategic interaction. It provides an in-depth logical study of the currently dominant epistemic approaches to non-cooperative games, with an eye both to the attractions and to the serious challenges facing the Epistemic Programme". Wlodek Rabinowicz, Professor of Practical Philosophy, Department of Philosophy, Lund University . (shrink)

There has been a great deal of interaction among game theorists, philosophers and logicians in certain foundational problems concerning rationality, the formalization of knowledge and practical reasoning, and models of learning and deliberation. This volume brings together the work of some of the pre-eminent figures in their respective disciplines, all of whom are engaged in research at the forefront of their fields. Together they offer a conspectus of the interaction of game theory, logic and epistemology in the (...) formal models of knowledge, belief, deliberation and learning, and in the relationship between Bayesian decision theory and game theory, as well as between bounded rationality and computational complexity. (shrink)

Bounded rationality gets a bad rap in epistemology. It is argued that theories of bounded rationality are overly context‐sensitive; conventionalist; or dependent on ordinary language (Carr, 2022; Pasnau, 2013). In this paper, I have three aims. The first is to set out and motivate an approach to bounded rationality in epistemology inspired by traditional theories of bounded rationality in cognitive science. My second aim is to show how this approach can answer recent (...) challenges raised for theories of bounded rationality. My third aim is to clarify the role of rational ideals in bounded rationality. (shrink)

The paper argues that the Nash Equilibrium Refinement Programme was less successful than its competitor, the Epistemic Programme. The prime criterion of success is the extent to which the programmes were able to reach the key objective guiding non-cooperative game theory for much of the twentieth century, namely, to develop a complete characterisation of the strategic rationality of economic agents in the form of the ultimate solution concept for any normal form and extensive game. The paper explains (...) this in terms of unjustified degrees of mathematisation in Nash Equilibrium Refinement Programme. While this programme’s mathematical models were often inspired by purely mathematical concerns rather than the economic phenomena they were intended to model, the Epistemic Programme’s models were developed with a keen eye to the role beliefs and desires play in strategic interaction between rational economic agents playing games; that is, their interactive epistemology. The Epistemic Programme succeeded in developing mathematical models formalising aspects of strategic interaction that remained implicit in the Nash Equilibrium Refinement Programme owing to an unjustified degree of mathematisation. As a result, the Epistemic Programme is the more successful theory.Keywords: Epistemic Programme; Game theory; Interactive epistemology; Mathematisation; Nash equilibrium. (shrink)

Epistemic reliabilism holds that a belief is justified if and only if it is produced by a reliable or truth-conducive process. I argue that reliabilism offers an epistemology for bounded rationality. This latter concept refers to normative and descriptive accounts of real-world reasoning instead of some ideal reasoning. However, as initially formulated, reliabilism involves an absolute, context-independent assessment of rationality that does not do justice to the fact that several processes are reliable in some reasoning environments but (...) not in others, as is widely reported in the cognitive sciences literature. I consider possible solutions to this problem. Resorting to ‘normality reliabilism’, a variant of the theory, is one; but I find it insufficient. Therefore, in addition, I propose to relativise the reliability assessment to reasoning environments. This novel version of reliabilism fits bounded rationality better than the original one does. (shrink)

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. (shrink)

This LNCS book is part of the FOLLI book series and constitutes the proceedings of the 9th International Workshop on Logic, Rationality, and Interaction, LORI 2023, held in Jinan, China, in October 2023. The 15 full papers presented together with 7 short papers in this book were carefully reviewed and selected from 40 submissions. The workshop covers a wide range on the following topics such as agency; argumentation and agreement; belief representation; probability and uncertainty; belief revision and belief merging; (...) knowledge and action; dynamics of informational attitudes; intentions, plans, and goals; decision making and planning; preference and utility; cooperation; strategic reasoning and game theory; epistemology; social choice; social interaction; speech acts; knowledge representation; norms and normative systems; natural language; rationality; philosophical logic. (shrink)

A generalization of the standard n-person game is presented, with flexible information requirements suitable for players constrained by bounded rationality. Strategies (complete contingency plans) are replaced by "policies," i. e., end-mean pairs of candidate goals and "controls" (partial contingency plans). The existence of individual objective functions over the joint policy choice set is axiomatized in terms of primitive preference and probability orders. Conditions are given for the existence of pure policy Nash equilibrium points in n-person games, and (...) pure policy Nash bargaining and equilibrium threat solutions in 2-person policy games. Connectedness of the policy and payoff sets is not required. (shrink)

Normative game theory unsatisfactorily explains rational behavior. Real people do not behave as predicted, and what is prescribed as rational behavior is normally unattainable in real-life. The problem is that current normative analysis does not account for people's cognitive limitations – their bounded rationality. However, this paper develops an account of bounded rationality that explains the rationality of more realistic behavior. I focus on the Centipede Game, in which boundedly rational players explore and (...) test others' immediate behavior, until they can apply limited backward induction. The result is that the game has a solution in the form of a subjective Nash equilibrium, which boundedly rational players can possibly realize. (shrink)

Game theory based on rational choice is compared with game theory based on evolutionary, or other adaptive, dynamics. The Nash equilibrium concept has a central role to play in both theories, even though one makes extremely strong assumptions about cognitive capacities and common knowledge of the players, and the other does not. Nevertheless, there are also important differences between the two theories. These differences are illustrated in a number of games that model types of interaction that are key (...) ingredients for any theory of the social contract. (shrink)

The paper begins by providing a game-theoretic reconstruction of Gilbert’s (1989) philosophical critique of Lewis (1969) on the role of salience in selecting conventions. Gilbert’s insight is reformulated thus: Nash equilibrium is insufficiently powerful as a solution concept to rationalize conventions for unboundedly rational agents if conventions are solutions to the kinds of games Lewis supposes. Both refinements to NE and appeals to bounded rationality can plug this gap, but lack generality. As Binmore (this issue) argues, evolutive (...) game theory readily explains the origin of conventional behavior, but that is not Lewis’s project. Gilbert’s critique is generalized by reference to Bacharach’s (2006) work on team reasoning in games. The paper then argues that although Lewis’s account of the rationalization of conventions is shown by the reconstruction of Gilbert’s critique to be incomplete, Gilbert is wrong to conclude that classical (‘eductive’) game theory lacks the resources to explain conformity to conventions among people. A game-theoretic account of the dynamics of socialization, based on Ross’s (2005, 2006) idea of ‘game determination’, rationalizes choices of conventional strategies in overlapping generations contexts, provided agents are products of evolutionary selection and know that other players are also such products. (shrink)

Although it may seem from its formalism that game theory must have sprung from the mind of John von Neumann as a corollary of his work on computers or theoretical physics, it should come as no real surprise to philosophers that game theory is the articulation of a historically developing philosophical conception of rationality in thought and action. The history of ideas about rationality is deeply contradictory at many turns. While there are theories of rationality (...) that claim it is fundamentally social and aims at understanding and molding all facets of human psychological life, game theory takes rationality to be essentially located in individuals and to concern only the means to achieve predetermined ends. Thus, there are some thinkers who have made important contributions to this history who do not appear in the story of game theory at all, among them, Plato, Kant, and Hegel. There is, however, a clear trail to follow linking theories of instrumental rationality from Aristotle to the nineteenth-century marginalist economists and ultimately to von Neumann and Morgenstern and contemporary game theorists, that historically grounds game theory as a model of rational interaction. (shrink)

Although it may seem from its formalism that game theory must have sprung from the mind of John von Neumann as a corollary of his work on computers or theoretical physics, it should come as no real surprise to philosophers that game theory is the articulation of a historically developing philosophical conception of rationality in thought and action. The history of ideas about rationality is deeply contradictory at many turns. While there are theories of rationality (...) that claim it is fundamentally social and aims at understanding and molding all facets of human psychological life, game theory takes rationality to be essentially located in individuals and to concern only the means to achieve predetermined ends. Thus, there are some thinkers who have made important contributions to this history who do not appear in the story of game theory at all, among them, Plato, Kant, and Hegel. There is, however, a clear trail to follow linking theories of instrumental rationality from Aristotle to the nineteenth-century marginalist economists and ultimately to von Neumann and Morgenstern and contemporary game theorists, that historically grounds game theory as a model of rational interaction. (shrink)

Bicchieri's topic is the modeling of interaction between decision makers in situations in which the outcome of the interaction depends on what the parties jointly do. Examples include chess, firms competing for business, politicians competing for votes, jury members deciding on a verdict, animals fighting over prey, bidders competing in auctions, threats and punishments in long-term relationships. Rationality assumptions are a basic ingredient of game theory, but though rational choice might be unproblematic in normative decision theory, it becomes (...) problematic in interactive contexts, where the outcome of one’s choice depends on the actions of other agents. Another basic ingredient is the idea of equilibrium play: roughly, an equilibrium is a combination of strategies, one for each player, such that each player’s strategy is a best reply to the other players’ choices. Thus it is individually rational for each agent to play her equilibrium strategy; but, notoriously, such individually rational play can lead to sub-optimal outcomes, as in the well-known prisoner’s dilemma. The relationship between rationality assumptions and equilibrium play is Bicchieri’s main focus. (shrink)

FoLLI-LNCS is the publication platform for the Association of Logic, Language and Information. The Association was founded in 1991 to advance research and education on the interface between logic, linguistics, computer science, and cognitive science. The FoLLI Publications on Logic, Language and Information aim to disseminate results of cutting-edge research and tutorial materials in these interdisciplinary areas. This LNCS volume is part of FoLLi book serie and contains the papers presented at the 5th International Workshop on Logic, Rationality and (...) Interaction/, held in October 2015 in Taipei, Taiwan. The topics covered in this program well represent the span and depth that hasby now become a trademark of the LORI workshop series, where logic interfaceswith disciplines as diverse as game theory and decision theory, philosophyand epistemology, linguistics, computer science and artificial intelligence. (shrink)

Psychological game theory encompasses formal theories designed to remedy game-theoretic indeterminacy and to predict strategic interaction more accurately. Its theoretical plurality entails second-order indeterminacy, but this seems unavoidable. Orthodox game theory cannot solve payoff-dominance problems, and remedies based on interval-valued beliefs or payoff transformations are inadequate. Evolutionary game theory applies only to repeated interactions, and behavioral ecology is powerless to explain cooperation between genetically unrelated strangers in isolated interactions. Punishment of defectors elucidates cooperation in social dilemmas (...) but leaves punishing behavior unexplained. Team reasoning solves problems of coordination and cooperation, but aggregation of individual preferences is problematic. (shrink)

Being scientific research a process of social interaction, this process can be studied from a game-theoretic perspective. Some conceptual and formal instruments that can help to understand scientific research as a game are introduced, and it is argued that game theoretic epistemology provides a middle ground for 'rationalist' and 'constructivist' theories of scientific knowledge. In the first part , a description of the essential elements of game of science is made, using an inferentialist conception of (...) class='Hi'>rationality. In the second part , some ideas for the reconstruction of case studies are introduced, and applied to one example: Latour's analysis of Joliot's attempt to build an atomic bomb. Lastly, in the third part , a formal analysis of the constitution of scientific consensus is offered. (shrink)

Hostile epistemology is the study of how environmental features exploit our cognitive vulnerabilities. I am particularly interested in those vulnerabilities arise from the basic character of our epistemic lives. We are finite beings with limited cognitive resources, perpetually forced to reasoning a rush. I focus on two sources of unavoidable vulnerability. First, we need to use cognitive shortcuts and heuristics to manage our limited time and attention. But hostile forces can always game the gap between the heuristic and the (...) ideal. Second, we need to trust others, and trust makes us vulnerable. In particular, we need to trust experts whose expertise lies beyond our individual ability to vet. So we must rely on various imperfect signals and proxies, like institutional affiliation, to manage our trust. We are forced to use these imperfect and exploitable forms of reasoning, in order to cope with a cognitively overwhelming world. I present the hostile epistemology framework as a counterbalance to vice epistemology, which tends to locate responsibility for bad beliefs in the character of the believer. I draw two conclusions from my analysis. First: suppose we accept that that only communities and institutions can know about the world. This deeply social approach doesn’t solve the problem of expert identification. The individual still faces a problem: given their incomplete understanding, how should the individual pick which group to trust? Second: we might have hoped to get some kind of static picture of the right principles of reasoning — but hostile epistemology presents a different picture. We have to use risky heuristics and shortcuts, which hostile forces can game and exploit. We can respond by shifting to a different set of heuristics, but this simply shifts the location of our vulnerabilities. These new heuristics are also exploitable. There is no end to this, only a constant struggle to adapt. Limited beings in a hostile epistemic environment are locked in an unending epistemic arms race. (shrink)

It is argued that a truly Humean approach to social interaction and to normative reflection on how we should interact needs to get even closer to the facts than the Binmore program suggests. In view of the facts Binmore’s normative conclusions on bargaining as well as on the nature of the equilibria of the game of life both seem precarious.

p. cm. — (Zeuthen lecture book series) Includes bibliographical references (p. ) and index. ISBN 0-262-18187-8 (hardcover : alk. paper). — ISBN 0-262-68100-5 (pbk. : alk. paper) 1. Decision-making. 2. Economic man. 3. Game theory. 4. Rational expectations (Economic theory) I. Title. II. Series.

Simple game experiments of the reward allocation, dictator and ultimatum type are used to demonstrate that true explanations of social phenomena cannot conceivably be derived in terms of the perfect rationality concept underlying neo-classical economics. We explore in some depth, if speculatively, how experimental game theory might bring us closer to a new synthesis or at least the nucleus of a general theory of ‘games and boundedly rational economic behavior’ with enhanced explanatory power.

This volume presents 38 classic texts in formal epistemology, and strengthens the ties between research into this area of philosophy and its neighbouring intellectual disciplines. The editors provide introductions to five subsections: Bayesian Epistemology, Belief Change, Decision Theory, Interactive Epistemology and Epistemic Logic. 'Formal epistemology' is a term coined in the late 1990s for a new constellation of interests in philosophy, the origins of which are found in earlier works of epistemologists, philosophers of science and logicians. It addresses a (...) growing agenda of problems concerning knowledge, belief, certainty, rationality, deliberation, decision, strategy, action and agent interaction - and it does so using methods from logic, probability, computability, decision and game theory. The volume also includes a thorough index and suggestions for further reading, and thus offers a complete teaching and research package for students as well as research scholars of formal epistemology, philosophy, logic, computer science, theoretical economics and cognitive psychology. (shrink)

It is widely believed that experimental results of behavioral game theory undermine standard economic and game theory. This paper suggests that experimental results present serious theoretical modeling challenges, but do not undermine two pillars of contemporary economic theory: the rational actor model, which holds that individual choice can be modeled as maximization of an objective function subject to informational and material constraints, and the incentive compatibility requirement, which holds that macroeconomic quantities must be derived from the interaction and (...) aggregation of individual choices. However, we must abandon the notion that rationality implies self-regarding behavior and the assumption that contracts are costlessly enforced by third parties. (shrink)

While game theory has been transformative for decision making, the assumptions made can be overly restrictive in certain instances. In this work, we investigate some of the underlying assumptions of rationality, such as mutual consistency and best response, and consider ways to relax these assumptions using concepts from level-k reasoning and quantal response equilibrium (QRE) respectively. Specifically, we propose an information-theoretic two-parameter model called the quantal hierarchy model, which can relax both mutual consistency and best response while still (...) approximating level-k, QRE, or typical Nash equilibrium behavior in the limiting cases. The model is based on a recursive form of the variational free energy principle, representing higher-order reasoning as (pseudo) sequential decision-making in extensive-form game tree. This representation enables us to treat simultaneous games in a similar manner to sequential games, where reasoning resources deplete throughout the game-tree. Bounds in player processing abilities are captured as information costs, where future branches of reasoning are discounted, implying a hierarchy of players where lower-level players have fewer processing resources. We demonstrate the effectiveness of the quantal hierarchy model in several canonical economic games, both simultaneous and sequential, using out-of-sample modelling. (shrink)

With the discovery of voluminous discordant empirical evidence, maximizing expected utility is rapidly disappearing as the core of the theory of human rationality, and a theory of bounded rationality, embracing both the processes and products of choice, is replacing it. There remains a large task of organizing our picture of economic and social processes and adding the new facts needed to shape the theory in an empirically sound way. It is also urgent that new tools now available (...) for conducting empirical inquiry and constructing models be incorporated in social science graduate education. (shrink)

Games, Norms, and Reasons: Logic at the Crossroads provides an overview of modern logic focusing on its relationships with other disciplines, including new interfaces with rational choice theory, epistemology, game theory and informatics. This book continues a series called "Logic at the Crossroads" whose title reflects a view that the deep insights from the classical phase of mathematical logic can form a harmonious mixture with a new, more ambitious research agenda of understanding and enhancing human reasoning and intelligent interaction. (...) The editors have gathered together articles from active authors in this new area that explore dynamic logical aspects of norms, reasons, preferences and beliefs in human agency, human interaction and groups. The book pays a special tribute to Professor Rohit Parikh, a pioneer in this movement. (shrink)

Games are played everywhere: from economics and online auctions to social interactions, and game theory is about how to play such games in a rational way, and how to maximize their outcomes. This VSI reveals, without mathematical equations, the insights the theory can bring to everything from how to play poker optimally to the sex ratio among bees.

Over the past two decades, academic economics has undergone a mild revolution in methodology. The language, concepts and techniques of noncooperative game theory have become central to the discipline. This book provides the reader with some basic concepts from noncooperative theory, and then goes on to explore the strengths, weaknesses, and future of the theory as a tool of economic modelling and analysis. The central theses are that noncooperative game theory has been a remarkably popular tool in economics (...) over the past decade because it allows analysts to capture essential features of dynamic competition and competition where some parties have proprietary information. The theory is weakest in providing a sense of when it - and equilibrium analysis in particular - can be applied and what to do when equilibrium analysis is inappropriate. Many of these weaknesses can be addressed by the consideration of individuals who are boundedly rational and learn imperfectly from the past. Written in a non-technical style and working by analogy, the book, first given as part of the Clarendon Lectures in Economics, is readily accessible to a broad audience and will be of interest to economists and students alike. Knowledge of game theory is not required as the concepts are developed as the book progresses. (shrink)

The notion of “bounded rationality” was introduced by Simon as an appropriate framework for explaining how agents reason and make decisions in accordance with their computational limitations and the characteristics of the environments in which they exist (seen metaphorically as two complementary scissor blades).We elaborate on how bounded rationality is usually conceived in psychology and on its relationship with logic. We focus on the relationship between heuristics and some non-monotonic logical systems. These two categories of cognitive (...) tools share fundamental features. As a step further, we show that in some cases heuristics themselves can be formalized from this logic perspective. We have therefore two main aims: on the one hand, to demonstrate the relationship between the bounded rationality programme and logic, understood in a broad sense; on the other hand, to provide logical tools of analysis of already known heuristics. This may lead to results such as the characterization of fast and frugal binary trees in terms of their associated logic program here provided. (shrink)

Game theory is the mathematical study of strategy and conflict. It has wide applications in economics, political science, sociology, and, to some extent, in philosophy. Where rational choice theory or decision theory is concerned with individual agents facing games against nature, game theory deals with games in which all players have preference orderings over the possible outcomes of the game. This paper gives an informal introduction to the theory and a survey of applications in diverse branches of (...) philosophy. No criticism is reviewed. Game theory is shown at work in discussions about epistemological dependence, liberalism and efficiency, Hume’s concept of convention, morality and rationality, and distributive justice and egalitarianism. A guide to the literature provides hints at applications in collective intentionality, epistemology, ethics, history of philosophy, logic, philosophy of language, and political philosophy. (shrink)

Game theory is a mathematical theory of strategic interactions between rational agents. With much success, it has been widely applied in various areas of the social sciences, especially economics and sociology. However, it has been relatively and rarely used in the analyses pursued in legal theory and legal dogmatics. The present collection fills this gap and discusses game theory as a useful tool for legal scholars in solving the various problems of legal philosophy or legal dogmatics. It also (...) includes two skeptical voices regarding the applicability of game theory in legal analysis. The book will be useful for scholars in the field of legal theory, as well as for philosophers and economists. (shrink)

Contemporary epistemological and cognitive studies, as well as recent trends in computer science and game theory have revealed an increasingly important and intimate relationship between Information, Interaction, and Agency. Agents perform actions based on the available information and in the presence of other interacting agents. From this perspective Information, Interaction, and Agency neatly ties together classical themes like rationality, decision-making and belief revision with games, strategies and learning in a multi-agent setting. Unified by the central notions Information, Interaction, (...) and Agency, the essays in this volume provide refreshing methodological perspectives on belief revision, dynamic epistemic logic, von Neumann games, and evolutionary game theory; all of which in turn are central approaches to understanding our own rationality and that of other agents. (shrink)

In the literature there are at least two main formal structures to deal with situations of interactive epistemology: Kripke models and type spaces. As shown in many papers :149–225, 1999; Battigalli and Siniscalchi in J Econ Theory 106:356–391, 2002; Klein and Pacuit in Stud Log 102:297–319, 2014; Lorini in J Philos Log 42:863–904, 2013), both these frameworks can be used to express epistemic conditions for solution concepts in game theory. The main result of this paper is a formal (...) comparison between the two and a statement of semantic equivalence with respect to two different logical systems: a doxastic logic for belief and an epistemic–doxastic logic for belief and knowledge. Moreover, a sound and complete axiomatization of these logics with respect to the two equivalent Kripke semantics and type spaces semantics is provided. Finally, a probabilistic extension of the result is also presented. A further result of the paper is a study of the relationship between the epistemic–doxastic logic for belief and knowledge and the logic STIT by Belnap and colleagues. (shrink)

Can rational agents coordinate in simultaneous interactions? According to standard game theory they cannot, even if there is a uniquely best way of doing so. To solve this problem we propose an argument in favor of ‘belief-less reasoning’, a mode of inference that leads to converge on the optimal solution ignoring the beliefs of the other players. We argue that belief-less reasoning is supported by a commonsensical Principle of Relevant Information that every theory of rational decision must satisfy. We (...) show that this principle can be used to justify (some versions of) team reasoning, as well as other schemes of practical reasoning that do not involve sophisticated meta-representation. (shrink)

The first reference on rationality that integrates accounts from psychology and philosophy, covering descriptive and normative theories from both disciplines. Both analytic philosophy and cognitive psychology have made dramatic advances in understanding rationality, but there has been little interaction between the disciplines. This volume offers the first integrated overview of the state of the art in the psychology and philosophy of rationality. Written by leading experts from both disciplines, The Handbook of Rationality covers the main normative (...) and descriptive theories of rationality—how people ought to think, how they actually think, and why we often deviate from what we can call rational. It also offers insights from other fields such as artificial intelligence, economics, the social sciences, and cognitive neuroscience. The Handbook proposes a novel classification system for researchers in human rationality, and it creates new connections between rationality research in philosophy, psychology, and other disciplines. Following the basic distinction between theoretical and practical rationality, the book first considers the theoretical side, including normative and descriptive theories of logical, probabilistic, causal, and defeasible reasoning. It then turns to the practical side, discussing topics such as decision making, bounded rationality, game theory, deontic and legal reasoning, and the relation between rationality and morality. Finally, it covers topics that arise in both theoretical and practical rationality, including visual and spatial thinking, scientific rationality, how children learn to reason rationally, and the connection between intelligence and rationality. (shrink)

It is widely believed that experimental results of behavioral game theory undermine standard economic and game theory. This paper suggests that experimental results present serious theoretical modeling challenges, but do not undermine two pillars of contemporary economic theory: the rational actor model, which holds that individual choice can be modeled as maximization of an objective function subject to informational and material constraints, and the incentive compatibility requirement, which holds that macroeconomic quantities must be derived from the interaction and (...) aggregation of individual choices. However, we must abandon the notion that rationality implies self-regarding behavior and the assumption that contracts are costlessly enforced by third parties. (shrink)

We present an axiomatic approach for a class of finite, extensive form games of perfect information that makes use of notions like “rationality at a node” and “knowledge at a node.” We distinguish between the game theorist's and the players' own “theory of the game.” The latter is a theory that is sufficient for each player to infer a certain sequence of moves, whereas the former is intended as a justification of such a sequence of moves. While (...) in general the game theorist's theory of the game is not and need not be axiomatized, the players' theory must be an axiomatic one, since we model players as analogous to automatic theorem provers that play the game by inferring (or computing) a sequence of moves. We provide the players with an axiomatic theory sufficient to infer a solution for the game (in our case, the backwards induction equilibrium), and prove its consistency. We then inquire what happens when the theory of the game is augmented with information that a move outside the inferred solution has occurred. We show that a theory that is sufficient for the players to infer a solution and still remains consistent in the face of deviations must be modular. By this we mean that players have distributed knowledge of it. Finally, we show that whenever the theory of the game is group-knowledge (or common knowledge) among the players (i.e., it is the same at each node), a deviation from the solution gives rise to inconsistencies and therefore forces a revision of the theory at later nodes. On the contrary, whenever a theory of the game is modular, a deviation from equilibrium play does not induce a revision of the theory. (shrink)

To know is to cognize, to cognize is to be a culturally bounded, rationality-bounded and environmentally located agent. Knowledge and cognition are thus dual aspects of human sociality. If social epistemology has the formation, acquisition, mediation, transmission and dissemination of knowledge in complex communities of knowers as its subject matter, then its third party character is essentially stigmergic. In its most generic formulation, stigmergy is the phenomenon of indirect communication mediated by modifications of the environment. Extending this (...) notion one might conceive of social stigmergy as the extra-cranial analog of an artifcial neural network providing epistemic structure. This paper recommends a stigmergic framework for social epistemology to account for the supposed tension between individual action, wants and beliefs and the social corpora. We also propose that the so-called "extended mind" thesis offers the requisite stigmergic cognitive analog to stigmergic knowledge. Stigmergy as a theory of interaction within complex systems theory is illustrated through an example that runs on a particle swarm optimization algorithm. (shrink)

It is certainly the case that morality governs the interactions that take place between individuals. But what if morality exists because of these interactions? This book, first published in 2007, argues for the claim that much of the behaviour we view as 'moral' exists because acting in that way benefits each of us to the greatest extent possible, given the socially structured nature of society. Drawing upon aspects of evolutionary game theory, the theory of bounded rationality, and (...) computational models of social networks, it shows both how moral behaviour can emerge in socially structured environments, and how it can persist even when it is not typically viewed as 'rational' from a traditional economic perspective. This book also provides a theory of how moral principles and the moral sentiments play an indispensable role in effective choice, acting as 'fast and frugal heuristics' in social decision contexts. (shrink)

Rational individuals who perceive information sequentially are confronted to cognitive dissonance and dynamic uncertainty in a way that sets a natural limit to the ex post efficiency of their choices. From the normative perspective which ignores this dynamic uncertainty, their rationality seems limited. Sequential perception is assumed in a model of Bayesian revision of the contingent preference in a repeated choice. This model predicts both the cognitive dissonance phenomenon studied by Festinger and the formation of stable habits. It also (...) shows how an ordinary man can be rational with bounded informational and computational abilities and, for the same reasons, give a disproportionate weight to impressions without any normative value in his own choices and judgments. Sequential perception and cognitive consistency offer a credible alternative to the cognitive bias paradigm for predicting anomalies in choice and game behavior.Des individus logiques percevant l’information de manière séquentielle sont soumis à une dissonance cognitive et une incertitude dynamique qui limitent naturellement l’efficacité ex post de leurs choix. Du point de vue normatif, qui ignore cette incertitude dynamique, leur rationalité apparaît limitée. L’hypothèse de perception séquentielle est introduite dans un modèle de révision bayésienne de la préférence contingente lors d’un choix répété. Ce modèle prédit à la fois le phénomène de dissonance cognitive étudié par Festinger et la formation d’une habitude stable. Il montre aussi comment un homme ordinaire peut être rationnel sans disposer de capacités d’information et de calcul démesurées et, pour les mêmes raisons, subir l’influence disproportionnée d’impressions dénuées de valeur normative dans les choix ou les jugements qu’il porte. La perception séquentielle et la cohérence cognitive offrent une alternative crédible au paradigme des biais cognitifs pour expliquer tous les comportements humains qui réfutent la théorie normative des choix et des jeux. (shrink)

Two views of game theory are discussed: (1) game theory as a description of the behavior of rational individuals who recognize each other’s rationality and reasoning abilities, and (2) game theory as an internally consistent recommendation to individuals on how to act in interactive situations. It is shown that the same mathematical tool, namely modal logic, can be used to explicitly model both views.

Is game theory good for us? This may seem an odd question. In the strict sense, game theory—the axiomatic account of interaction between rational agents—is as morally neutral as arithmetic. But the popularization of game theory as a way of thinking about social interaction is far from neutral. Consider the contrast between characterizing bargaining over distribution as a “zero-sum society” and focussing on “win-win” cooperative solutions. These reflections bring us to the book under review, Prisoner's Dilemma, a (...) popular introduction to game theory and its relation to ethics by the respected science writer William Poundstone. The book begins with a moral dilemma and ends by discussing the evolution of co-operation. Poundstone emphasizes—correctly, to my mind—the ethical potential of game theory. He concludes his first chapter with this striking claim: “Today's practitioners of game theory are attempting to forge a kind of ethical progress. Is there any way to promote the common good in a prisoner's dilemma? The attempt to answer this question is one of the great intellectual adventures of our time”. (shrink)

Contemporary theories of deterrence place a strong emphasis on coherency between model and theory. Schelling’s contention of irrational threats for successful deterrence abandons the rationality assumption to explain how a player can deter, thereby departing from the standard game theoretic solution concepts. It is a misfit model in relation to a deterrence theory and, therefore, excluded. The article defends and remodels Schelling’s intuition by employing the level-k model. It is shown that an unsophisticated player that randomizes over its (...) strategies brings about an advantageous outcome. The model also shows that the belief that a player randomizes has the same deterrent effect, as an actual stochastic choice, like Schelling suggested. While this means Schelling’s idea can be saved, it is still problematic how we should view contributions of bounded rationality in relation to current deterrence theory. The article suggests that separating the purpose of a model in conjunction with allowing other scientific ideals than model-theory coherence permits a broader and philosophically sounder approach. (shrink)

We propose a minimal logic for interactive epistemology based on a qualitative representation of epistemic individual and group attitudes including knowledge, belief, strong belief, common knowledge and common belief. We show that our logic is sufficiently expressive to provide an epistemic foundation for various game-theoretic solution concepts including “1-round of deletion of weakly dominated strategies, followed by iterated deletion of strongly dominated strategies” ) and “2-rounds of deletion of weakly dominated strategies, followed by iterated deletion of strongly dominated (...) strategies” ). Axiomatization and complexity results for the logic are given in the paper. (shrink)

In this paper I draw from Martin Heidegger’s phenomenology of the 1920s to outline some basic features of his theory of intentionality that I believe have not been fully appreciated or utilized, and that allow for both novel and fruitful interventions in questions about meaning, the relationship between mind and the world, and epistemic justification, principally as they appear in John McDowell’s synoptic project in Mind and World. I argue that while elements of McDowell’s picture are ultimately unsatisfying and problematic, (...) much of his conceptual framework can and should be put into dialogue with Heidegger’s, and that in so doing we make available powerful resources for amending the McDowellian account. Moreover, these emendations have attractive implications for his distinctive desiderata. In particular, they provide original conceptions of normativity’s place in nature, of the boundaries of the space of reasons, and of the relationship between the answerability of thought both to the world and to human beings as a rational community. (shrink)

Nash Equilibrium is a central concept ingame theory. It has been argued that playing NashEquilibrium strategies is rational advice for agentsinvolved in one-time strategic interactions capturedby non-cooperative game theory. This essaydiscusses arguments for that position: vonNeumann–Morgenstern's argument for their minimaxsolution, the argument from self-enforcingagreements, the argument from the absence ofprobabilities, the transparency-of-reasons argument,the argument from regret, and the argument fromcorrelated equilibrium. All of these argumentseither fail entirely or have a very limited scope.Whatever the use of Nash Equilibrium is, therefore,it (...) is not useful as a rational recommendation inone-time strategic interactions. This is good newsfor Bayesians: although this discussion does notargue directly for the Bayesian idea of rationalityas expected utility maximization, it argues againsta position that has been regarded as a contender insituations of strategic interaction. (shrink)

Nash Equilibrium is a central concept ingame theory. It has been argued that playing NashEquilibrium strategies is rational advice for agentsinvolved in one-time strategic interactions capturedby non-cooperative game theory. This essaydiscusses arguments for that position: vonNeumann–Morgenstern's argument for their minimaxsolution, the argument from self-enforcingagreements, the argument from the absence ofprobabilities, the transparency-of-reasons argument,the argument from regret, and the argument fromcorrelated equilibrium. All of these argumentseither fail entirely or have a very limited scope.Whatever the use of Nash Equilibrium is, therefore,it (...) is not useful as a rational recommendation inone-time strategic interactions. This is good newsfor Bayesians: although this discussion does notargue directly for the Bayesian idea of rationalityas expected utility maximization, it argues againsta position that has been regarded as a contender insituations of strategic interaction. (shrink)

The paper discusses how research on embodied cognition in cognitive science can contribute to the naturalization of rationality. The investigation takes place in two steps. First, we provide a conceptual map of possible new ideas of rationality inspired by embodied cognition. Given the plurality of theories of embodied cognition, we distinguish different approaches according to their increasing degree of radicalism. We consider ecological rationality as currently the best candidate for naturalizing rationality, and, after identifying its descriptive (...) and normative building blocks, we provide an increasingly radical embodied interpretation of them. The outcome is four new concepts of rationality, in increasing order of embodied radicalism: _embodied bounded rationality_, _body rationality_, _extended rationality_, and _radical embodied rationality_. We emphasize that while less radical concepts currently align better with the idea of methodological naturalism, radical concepts are best conceived of as instances of ontological naturalism. The second step of our investigation concerns comparing the four embodied rationality concepts in light of three meta-criteria: internal epistemic values, empirical success, and intertheoretic compatibility. While empirical success currently favors less radical concepts, intertheoretic compatibility demonstrates the promises of rationality’s embodied radicalism. (shrink)