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Which is to blame: Instrumental rationality, or common knowledge?

Published online by Cambridge University Press:  02 October 2003

Matt Jones*
Affiliation:
Department of Psychology, University of Michigan, Ann Arbor, MI48109-1109http://umich.edu/~mattj
Jun Zhang*
Affiliation:
Department of Psychology, University of Michigan, Ann Arbor, MI48109-1109http://umich.edu/~mattj

Abstract:

Normative analysis in game-theoretic situations requires assumptions regarding players' expectations about their opponents. Although the assumptions entailed by the principle of common knowledge are often violated, available empirical evidence – including focal point selection and violations of backward induction – may still be explained by instrumentally rational agents operating under certain mental models of their opponents.

Type
Open Peer Commentary
Copyright
Copyright © Cambridge University Press 2003

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