Abstract
Psychological game theory encompasses formal theo- ries designed to remedy game-theoretic indeterminacy and to predict strategic interaction more accurately. Its theoretical plu- rality entails second-order indeterminacy, but this seems un- avoidable. Orthodox game theory cannot solve payoff-dominance problems, and remedies based on interval-valued beliefs or pay- off transformations are inadequate. Evolutionary game theory ap- plies only to repeated interactions, and behavioral ecology is pow- erless to explain cooperation between genetically unrelated strangers in isolated interactions. Punishment of defectors eluci- dates cooperation in social dilemmas but leaves punishing behav- ior unexplained. Team reasoning solves problems of coordination and cooperation, but aggregation of individual preferences is prob- lematic.
Highlights
The primary goal of the target article is to argue that the standard interpretation of instrumental rationality as expected utility maximization generates problems and anomalies when applied to interactive decisions and fails to explain certain empirical evidence
The commentaries come from eight different countries and an unusually wide range of disciplines, including psychology, economics, philosophy, biology, psychiatry, anthropology, and mathematics
The richness and fertility of game theory and experimental games owe much to the diversity of disciplines that have contributed to their development from their earliest days
Summary
The primary goal of the target article is to argue that the standard interpretation of instrumental rationality as expected utility maximization generates problems and anomalies when applied to interactive decisions and fails to explain certain empirical evidence. Hausman invokes rational beliefs in a plausible – though I believe unsuccessful – attempt to solve the payoff-dominance problem illustrated in the Hi-Lo Matching game (Fig. 2 in the target article).
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