Behavioural game theory
Pro-social preferences and strategic interactions
Instructor: Christophe Heintz
Office Hours: Hattyu
u. 14, room: 416.
By appt. (e-mail: christophe.heintz@gmail.com); or just pop in!
Type: CogSci research course, fall term, 2014
Class: Thursdays
13:30 – 15:10
Hattyu u. 14, 3th floor
The syllabus
includes the course description and a specification of the course requirements.
Goal:
introduce the model of rational decision making, or
homo economicus and specify the interest of the model
for psychologists. We will review the following issues:
á
The
role of incentives and cost-benefit analysis
á
Theory
of revealed preferences: explicit goals, implicit motivations, or mere
dispositions (evolutionary function)?
á
Taking risks into account
Main readings:
p.15-33
from:
Levitt and Dubner (2005) Freakonomics:
A Rogue Economist Explores the Hidden Side of Everything. New York: William
Morrow.
Chapter 1
of:
Frank,
Robert H. (2008) Microeconomics and Behavior.
McGraw-Hill.
To go further:
Any
introductory textbook on micro-economics. Including:
Frank,
Robert H. (2008) Microeconomics and Behavior. McGraw-Hill.
Exercises to do for the
following weeks (exercise 1 is due on week 2, exercise 2 is due on
week 4)
Goal:
Illustrate the work of behavioural economics with a set of examples showing
Òpredictable irrationalityÓ and ways to test and theorise such departures from
rational choice.
Main reading
Chapter 3 of:
Ariely,
Dan (2008). Predictably Irrational: The
Hidden Forces that Shape Our Decisions. New York: HarperCollins Publishers.
To go further
Ariely,
Dan (2008). Predictably Irrational: The
Hidden Forces that Shape Our Decisions. New York: HarperCollins Publishers.
Goal:
introducing the standard methods for investigating pro-social preferences, and
the main models specifying these preferences with utility functions.
Main reading
Fehr E., Fischbacher
U. (2002) Why social preferences matter - The impact of non-selfish
motives on competition, cooperation and incentives. The Economic Journal, 112,
p. 1-33
Supplementary
readings:
Charness G., Rabin M. (2002) Understanding social preferences with simple tests. Quarterly Journal of Economics, 117 (3),
p. 817-869.
Engel, C.
(2010) Dictator games: a meta-study. MPI Collective Goods Preprint No. 2010/07
First part of Guala, F. (2005) The Methodology
of Experimental Economics, Cambridge University Press.
Camerer (2003) p. 43 to 101
Handout 3a on Fehr and Fischbacher (2002) :
how social preferences impact key economic interactions
Handout 3b on Charness and Rabin (2002) :
experiments for calibrating the utility function of pro-social choices
Main reading
E Fehr, U Fischbacher and S. GŠtcher (2002)
Strong reciprocity, human cooperation, and the enforcement of social norms. Human nature, vol. 13, num. 1, pp. 1--25
Supplementary readings
Oucome vs. intention-based preferences
Falk A.,
Fehr E., Fischbacher u. (2008) Testing theories of
fairness. Intentions matter. Games and Economic Behavior,
62, p. 287-303
McCabe K., Rigdon M., Smith V.L. (2003) Positive reciprocity and
intentions in trust games. Journal of Economic Behavior
& Organization, 52, p. 267-275.
Bolton, G. and Ockenfels, A. (2000) A theory
of equity, reciprocity and competition. American
Economic Review, vol. 90, p. 166—196.
Strong vs. weak reciprocity
E. Fehr, S.
GŠchter (2002) Altruistic punishment in humans. Nature, vol. 415, pp. 137—140
Guala, F. (2011) ÒReciprocity: Weak or
Strong? What Punishment Experiments Do (and Do Not) DemonstrateÓ, DEAS Working
Paper 2010-23.BBS .
Evolutionary
considerations
Fehr, E.
& Henrich, J., (2003) Is Strong Reciprocity a Maladaptation. In Genetic and Culture Evolution of
Cooperation edited by Peter Hammerstein. MIT Press.
Gintis, H. (2000) Strong
reciprocity and human sociality. Journal of Theoretical Biology.
Vo. 206, pp. 169--179.
Main reading
Heintz, C., Celse,
J., Giardini, F., Max, S. (2014) Facing
othersÕ expectations: those that we prefer to fulfil and those that we ignore.
Working paper.
Supplementary readings
Dana, J.,
Cain, D. M., & Dawes, R. M. (2006). What you donÕt know won't hurt me:
Costly (but quiet) exit in dictator games. Organizational Behavior
and Human Decision Processes, 100, 193–201.
Dana, J., Weber, R. a., & Kuang, J. X.
(2007).
Exploiting moral wiggle room: experiments demonstrating an illusory preference
for fairness. Economic Theory, 33(1), 67–80.
Ockenfels,
A., & Werner, P. (2012). ÒHiding behind a small cakeÓ in a newspaper
dictator game. Journal of Economic Behavior &
Organization, 82(1), 82–85.
Vranceanu,
R., Sutan, A., & Dubart,
D. (2010). Trust and Financial Trades: Lessons from an Investment Game Where
Reciprocators Can Hide Behind Probabilities. Business.
Broberg, T., Ellingsen,
T., & Johannesson, M. (2007). Is generosity involuntary?
Economics Letters, 94(1), 32–37.
To go further: models
BŽnabou,
R., & Tirole, J. (2005). Incentives
and prosocial behavior.
Retrieved from http://www.nber.org/papers/w11535
BŽnabou,
R., & Tirole, J. (2009). Inrinsic
and Extrinsic Motivations. The Review of Economic Studies, 70(3),
489–520.
Main readings
Haley K., Fessler D. (2005) Nobody's
watching? Subtle cues affect generosity in an anonymous economic game,
Evolution and Human Behavior, 26, p. 245-256.
Supplementary readings
On eye-cues
Fehr E.,
Schneider F. (2009) Eyes are on us, but nobody cares: Are eye cues relevant for
strong reciprocity? Proceedings of the Royal Society B: Biological Sciences,
277(1686), p. 1315-1323
Ernest-Jones
M., Nettle D., Bateson M. (2011) Effects of eye images on everyday cooperative behavior: a field experiment, Evolution and Human Behavior, 32, 172-178.
Bateson M.,
Nettle D., Roberts G. (2006) Cues of being watched enhance cooperation in a
real world setting, Biology Letters, 2, p. 412-414
Shariff,
A.F., & Norenzayan, A. (2007). God is watching
you: Supernatural agent concepts increase prosocial behavior in an anonymous economic game. Psychological Science, 18, 803-809.
How much is due to framing?
Bardsley, N. (2007). Dictator game giving: altruism or
artefact? Experimental Economics, 11(2), 122–133. Retrieved from
http://dx.doi.org/10.1007/s10683-007-9172-2.
Burton-Chellew, Maxwell N., and Stuart A.
West. "Prosocial preferences do not explain human cooperation in
public-goods games." Proceedings of the National Academy of Sciences 110.1
(2013): 216-221.
Main readings
Henrich et. Al.
(2005) ÒEconomic manÓ in cross-cultural perspective: Behavioral
experiments in 15 small-scale societies. BBS.
Supplementary readings
Herrmann B., Thšni
C., GŠchter S. (2008) Antisocial punishment across
societies, Science, 319(5868), p.1362-7.
S. Lamba, R. Mace (2011) Demography and ecology drive variation in cooperation
across human populations. Proceedings
of the National Academy of Sciences 108 (35) p. 14426-14430
Heintz, C. (2013). What canÕt be inferred from
cross-cultural experimental games. Current
Anthropology, 54(2), 165–166.
Heintz, C., & Bardsley, N.
(2010). The implication of social cognition for experimental
economics. Mind & Society, 9(2), 113–118. doi:10.1007/s11299-010-0082-1
Granovetter
M (1985) Economic action and social structure: the problem of embeddedness. Am J Sociol 91(3):481–510
Goal: as
the name indicates, weÕll try to acquire the main notions and techniques of
game theory in just one session...
-
Example
of games
-
Dominance-solvable
games
-
Mixed
strategy
-
Nash
equilibria
Reading: any textbook in game theory. For
instance:
Binmore, K. (2007). Game
Theory: A Very Short Introduction. Art
History. Oxford University Press.
Main reading
Moln‡r, A., and C. Heintz (2014)
Prior beliefs about othersÕ social choices: People evaluate how prosocial others are and overestimate selfishness. Working
paper.
Further readings
Chapter 6 of Camerer,
C. F. (2003). Behavioral Game Theory: Experiments in Strategic
Interaction (Roundtable Series in Behaviorial
Economics) (p. 584). Princeton University Press.
Main reading
Sutan, A., & Willinger,
M. (2009). Guessing with negative feedback: An experiment. Journal of Economic Dynamics and Control, 33(5), 1123–1133.
To go further
Nagel, R. (1995). Unraveling in
guessing games: An experimental study. The American Economic Review, 85(5),
1313–1326.
Camerer, C., Ho, T.,
& Chong, J. (2004). A cognitive hierarchy model of games. The Quarterly Journal of
Economics.
Ohtsubo, Y., & Rapoport,
A. (2006). Depth of reasoning in strategic form games.
The Journal of Socio-Economics.
Main reading
Mehta, J, Starmer, C., & Sugden, R. (1994). The nature of salience: An experimental
investigation of pure coordination games. The American Economic Review.
Further readings
Mehta, Judith, Starmer, C., & Sugden, R. (1994). Focal points in pure coordination games:
An experimental investigation. Theory and
Decision, 36(2), 163–185.
Bardsley, N., Mehta, J., Starmer,
C., & Sugden, R. (2006). The nature of salience
revisited: cognitive hierarchy theory versus team reasoning. Economic Journal.
Crawford, V. (2008). The power of focal points is
limited: even minute payoff asymmetry may yield large coordination failures.
The American Economic Review, 98(4), 1443–1458.
Janssen, M. (2001). Rationalizing focal points. Theory and Decision, 50, 119–148.
Sugden, R. (1995). A
theory of focal points. The Economic Journal.
Main reading
Hugo Mercier, Emmanuel Trouche, Hiroshi Yama, Christophe
Heintz, Vittorio
Girotto (2014) Experts and laymen grossly
underestimate the beneÞts of argumentation. Thinking
and Reasoning.
To go further
Charness, G. and Sutter, M. (2012) Groups
Make Better Self-Interested Decisions. The Journal of Economic Perspectives. Vol. 26, No. 3, pp. 157-176.