Penn CIS 112 - Behavioral Game Theory (24 pages)

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Behavioral Game Theory



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Behavioral Game Theory

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Lecture Notes


Pages:
24
School:
University of Pennsylvania
Course:
Cis 112 - Networked Life.
Networked Life. Documents

Unformatted text preview:

Behavioral Game Theory A Brief Introduction Networked Life CSE 112 Spring 2005 Prof Michael Kearns Supplementary slides courtesy of Colin Camerer CalTech Behavioral Game Theory and Game Practice Game theory how rational individuals should behave Who are these rational individuals BGT looks at how people actually behave experiment by setting up real economic situations account for people s economic decisions don t break game theory when it works Fit a model to observations not rationality Feeling in ultimatum games How much do you offer out of 10 Proposer has 10 Offers x to Responder keeps 10 x What should the Responder do Self interest Take any x 0 Empirical Reject x 2 half the time How People UltimatumBargain Thousands of games have been played in experiments In different cultures around the world With different stakes With different mixes of men and women By students of different majors Etc etc etc Pretty much always two things prove true 1 2 Player 1 offers close to but less than half 40 or so Player 2 rejects low offers 20 or less Ultimatum offer experimental sites Ultimatum Bargaining across Cultures Sharing norms differ in the industrialized world Japan Israel lowest Roth et al 1991 Machiguenga farmers in Peru Henrich 2000 Offered 26 on average accepted all but 1 offer Very socially disconnected Ache in Paraguay Lamelara in Indonesia Made hyperfair more than 50 offers Headhunters potlatch culture whalers The Machiguenga independent families cash cropping slash burn gathered foods fishing hunting Fair offers correlate with market integration top cooperativeness in everyday life bottom Ultimatum offers across societies mean shaded mode is largest circle Ultimatum Bargaining across Majors Economics majors offer 7 less accept 7 less Carter and Irons 1991 They must have learned game theory but this behavior is consistent across years of study freshman to seniors maybe their game theoretic nature made them want to study economics Other studies show no correlation or



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