Incorporating belief-dependent motivation in games

Pierpaolo Battigalli, Roberto Corrao, Martin Dufwenberg

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

Psychological game theory (PGT), introduced by Geanakoplos et al. (1989) and significantly generalized by Battigalli and Dufwenberg (2009), extends the standard game theoretic framework by letting players’ utility at endnodes depend on their interactive beliefs. While it is understood that a host of applications that model and/or test the role of emotional and other psychological forces find their home in PGT, the framework is abstract and comprises complex mathematical objects, such as players’ infinite hierarchies of beliefs. Thus, PGT provides little guidance on how to model specific belief-dependent motivations and use them in game theoretic analysis. This paper takes steps to fill this gap. Some aspects are simplified – e.g., which beliefs matter – but others are refined and brought closer to applications by providing more structure. We start with belief-dependent motivations and show how to embed them in game forms to obtain psychological games. We emphasize the role of time and of the perception of players’ intentions. We take advantage of progress made on the foundations of game theory to expand and improve on PGT solution concepts.

Original languageEnglish (US)
JournalJournal of Economic Behavior and Organization
DOIs
StatePublished - Jan 1 2019

Fingerprint

Psychological
Game theory
Emotion
Game form
Solution concepts
Guidance

Keywords

  • Bayesian sequential equilibrium
  • Belief-dependent motivation
  • Intentions
  • Psychological game theory
  • Rationalizability
  • Self-confirming equilibrium
  • Time

ASJC Scopus subject areas

  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management

Cite this

Incorporating belief-dependent motivation in games. / Battigalli, Pierpaolo; Corrao, Roberto; Dufwenberg, Martin.

In: Journal of Economic Behavior and Organization, 01.01.2019.

Research output: Contribution to journalArticle

@article{3d11e0403c3b45b1a818231512adae17,
title = "Incorporating belief-dependent motivation in games",
abstract = "Psychological game theory (PGT), introduced by Geanakoplos et al. (1989) and significantly generalized by Battigalli and Dufwenberg (2009), extends the standard game theoretic framework by letting players’ utility at endnodes depend on their interactive beliefs. While it is understood that a host of applications that model and/or test the role of emotional and other psychological forces find their home in PGT, the framework is abstract and comprises complex mathematical objects, such as players’ infinite hierarchies of beliefs. Thus, PGT provides little guidance on how to model specific belief-dependent motivations and use them in game theoretic analysis. This paper takes steps to fill this gap. Some aspects are simplified – e.g., which beliefs matter – but others are refined and brought closer to applications by providing more structure. We start with belief-dependent motivations and show how to embed them in game forms to obtain psychological games. We emphasize the role of time and of the perception of players’ intentions. We take advantage of progress made on the foundations of game theory to expand and improve on PGT solution concepts.",
keywords = "Bayesian sequential equilibrium, Belief-dependent motivation, Intentions, Psychological game theory, Rationalizability, Self-confirming equilibrium, Time",
author = "Pierpaolo Battigalli and Roberto Corrao and Martin Dufwenberg",
year = "2019",
month = "1",
day = "1",
doi = "10.1016/j.jebo.2019.04.009",
language = "English (US)",
journal = "Journal of Economic Behavior and Organization",
issn = "0167-2681",
publisher = "Elsevier",

}

TY - JOUR

T1 - Incorporating belief-dependent motivation in games

AU - Battigalli, Pierpaolo

AU - Corrao, Roberto

AU - Dufwenberg, Martin

PY - 2019/1/1

Y1 - 2019/1/1

N2 - Psychological game theory (PGT), introduced by Geanakoplos et al. (1989) and significantly generalized by Battigalli and Dufwenberg (2009), extends the standard game theoretic framework by letting players’ utility at endnodes depend on their interactive beliefs. While it is understood that a host of applications that model and/or test the role of emotional and other psychological forces find their home in PGT, the framework is abstract and comprises complex mathematical objects, such as players’ infinite hierarchies of beliefs. Thus, PGT provides little guidance on how to model specific belief-dependent motivations and use them in game theoretic analysis. This paper takes steps to fill this gap. Some aspects are simplified – e.g., which beliefs matter – but others are refined and brought closer to applications by providing more structure. We start with belief-dependent motivations and show how to embed them in game forms to obtain psychological games. We emphasize the role of time and of the perception of players’ intentions. We take advantage of progress made on the foundations of game theory to expand and improve on PGT solution concepts.

AB - Psychological game theory (PGT), introduced by Geanakoplos et al. (1989) and significantly generalized by Battigalli and Dufwenberg (2009), extends the standard game theoretic framework by letting players’ utility at endnodes depend on their interactive beliefs. While it is understood that a host of applications that model and/or test the role of emotional and other psychological forces find their home in PGT, the framework is abstract and comprises complex mathematical objects, such as players’ infinite hierarchies of beliefs. Thus, PGT provides little guidance on how to model specific belief-dependent motivations and use them in game theoretic analysis. This paper takes steps to fill this gap. Some aspects are simplified – e.g., which beliefs matter – but others are refined and brought closer to applications by providing more structure. We start with belief-dependent motivations and show how to embed them in game forms to obtain psychological games. We emphasize the role of time and of the perception of players’ intentions. We take advantage of progress made on the foundations of game theory to expand and improve on PGT solution concepts.

KW - Bayesian sequential equilibrium

KW - Belief-dependent motivation

KW - Intentions

KW - Psychological game theory

KW - Rationalizability

KW - Self-confirming equilibrium

KW - Time

UR - http://www.scopus.com/inward/record.url?scp=85067658944&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85067658944&partnerID=8YFLogxK

U2 - 10.1016/j.jebo.2019.04.009

DO - 10.1016/j.jebo.2019.04.009

M3 - Article

JO - Journal of Economic Behavior and Organization

JF - Journal of Economic Behavior and Organization

SN - 0167-2681

ER -