Preferences, Beliefs, and Strategic Plays in Games (joint work with Rudolf Kerschbamer, Jianying Qiu

We examine strategic plays in games while controlling for distributional preferences and beliefs. We elicit players' distributional preferences before they play a series of two-person strategic games. We also elicit players' belief about the opponent's strategies. Our control of distributional preferences does not rely on any particular parametric forms; it is rather based on revealed preferences. The payoff vectors in strategic games are the same as the payoff vectors in the distributional preferencestask. This allows us to examine whether preferences elicited in a static scenario - dictator game-like situations - predict choices in strategic games. The first-order beliefs combined with the payoff features in some of normal form games allows us to examine how beliefs might enter preferences directly, as suggested by psychological game theories. Finally, since players in strategic games know their opponent's choices in distributional preferences tests, our design allows us to examine whether this information is used in making own choice. In particular, we explore indirect reciprocity, i.e. do players behave nicely to people who are nice to others? Experimental results show that rational equilibrium prediction performs no better than randomness, whereas there is a strong consistency of choices in distributional preferences task with the choices in strategic games, both at the population level and at the individual level. We also find supporting evidence that beliefs could enter preferences directly. Finally, there is some evidence that people are nice to people who are nice to others.

Location: 
Hall 130, 1st floor, Feldman Building, Edmond J. Safra Campus
Date: 
Tuesday, August 15, 2017 - 10:00
Lecturers: 
Rene Levinsky
Charles University