Behavioral game theory

Author: (USA) Colin Camerer
Publisher:
Publish Date: 2006-05-25
Features: Game theory, as a standardized study of strategic choices, originated in the 1940s, with its methodology examining how emotionless "geniuses" should act in games. However, this approach overlooks how groups with emotions and limited foresight would behave in games, a question that has only recently been addressed. This book makes the first meaningful attempt to bridge this gap. Colin Camerer is one of the leading figures in this field. He utilizes psychological principles and hundreds of experimental studies to develop mathematical theories on reciprocal behavior, limited strategic choices, and learning processes, which help infer how individuals or groups would act under various strategic conditions in the real world. The author incorporates a wealth of cutting-edge research on strategic behavior, advancing the experimental science of behavioral economics by significant steps. The author's writing is fluent and easy to understand. Three aspects of behavioral game theory are clearly emphasized in this book:
1. The mathematical theory of how moral responsibility and the desire for revenge influence bargaining and mutual trust.
2. The theory of how the limitations of the human brain constrain reasoning steps like "I think he thinks."
3. The theory of how people optimize strategic choices through experiential learning.
There are several strategic interactions that can be explained by behavioral game theory, including bargaining, fraud in card games and sports, strikes, how customs (or conventions) coordinate joint actions, price competition and patent competition, as well as the establishment of personal reputation in business activities or daily life.
There are many books introducing standard game theory, all of which assume that idealized rational actors participate in games. However, this book takes a unique approach by integrating experimental results and psychology into standard strategic behavior theory. Whether you are a professional economist or scholars and students in economics, management, psychology, political science, anthropology, or biology, reading this book is essential if you wish to gain a more comprehensive understanding of strategic thinking.