Abstract
The purpose of this study is to explore the link between imagine-self perspective-taking and rational self-interested behavior in experimental normal-form games. Drawing on the concept of sympathy developed by Adam Smith and further literature on perspective-taking in games, we hypothesize that introduction of imagine-self perspective-taking by decision-makers promotes rational self-interested behavior in a simple experimental normal-form game. In our study, we examined behavior of 404 undergraduate students in the two-person game, in which the participant can suffer a monetary loss only if she plays her Nash equilibrium strategy and the opponent plays her dominated strategy. Results suggest that the threat of suffering monetary losses effectively discourages the participants from choosing Nash equilibrium strategy. In general, players may take into account that opponents choose dominated strategies due to specific not self-interested motivations or errors. However, adopting imagine-self perspective by the participants leads to more Nash equilibrium choices, perhaps by alleviating participants’ attributions of susceptibility to errors or non-self-interested motivation to the opponents.
Highlights
Weizsäcker (2003) coined the hypothesis that decision-makers’ tendency to ignore their opponents’ incentives in experimental normal-form games is an artifact of the experimental environments in the laboratories, and in particular of the use of abstract payoff matrix presentations in experimental procedures. Weizsäcker (2003) further suggests that adding a context to the experiments would help the subjects perceive their opponents’ decision problems more vividly and clearer
We explore the link between imagineself perspective-taking by decision-makers and their rational self-interested behavior, which is reflected by selecting Nash equilibrium strategies
In the third experimental group over 90% of subjects chose the Nash equilibrium strategy for a column player and at the same time about 59% of subjects chose the Nash equilibrium strategy T
Summary
Weizsäcker (2003) coined the hypothesis that decision-makers’ tendency to ignore their opponents’ incentives in experimental normal-form games is an artifact of the experimental environments in the laboratories, and in particular of the use of abstract payoff matrix presentations in experimental procedures. Weizsäcker (2003) further suggests that adding a context to the experiments (and probably developing a more realistic sense of strategic choice) would help the subjects perceive their opponents’ decision problems more vividly and clearer. Complementing Weizsäcker’s suggestion that developing a more realistic sense of strategic choice would help the players perceive their opponents’ decision problems clearer, and drawing on Adam Smith’s concept of sympathy (for an elaboration, please see paragraphs below ), we set out to investigate whether the Imagine-Self and Self-Interest subjects’ tendency to ignore their opponents’ incentives can be alleviated due to introduction of imagine-self perspective-taking (Stotland, 1969) by decision-makers To this end, we examined subjects’ behavior in a simple experimental normal-form game (for details, see Materials and Methods), in which one of the two players (row player) can suffer a monetary loss if and only if she plays her Nash equilibrium (pure) strategy and the other player (column player) plays her strictly dominated (pure) strategy
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