This paper proposes a general incomplete information framework for studying behavior in strategic games with stepwise (viz. `level-k' or `cognitive hierarchy') thinking, which has been found to describe strategic behavior well in experiments involving players' initial responses to games. It is...

We use the strategy method to classify subjects into cooperator types in a large-scale online Public Goods Game and find that free riders spend more time on making their decisions than conditional cooperators and other cooperator types. This result is robust to reversing the framing of the game...

We introduce a description of the power structure which is inherent in a strategic game form using the concept of an interaction sheaf. The latter assigns to each open set of outcomes a set of interaction arrays, specifying the changes that coalitions can make if outcome belongs to this open...

We investigate a repeated Cournot duopoly with strictly convex cost functions. In an example the set of Weakly Renegotiation Proof Equilibrium payoffs shrinks towards the joint profit maximizing payoff point as marginal costs are made to rise more rapidly.

We show that there is a unique correlated equilibrium, identical to the unique Nash equilibrium, in the classic Bertrand oligopoly model with homogenous goods. This provides a theoretical underpinning for the so-called "Bertrand paradox" and also generalizes earlier results on mixed-strategy...

It is an old ida in game theory that the justification of Nash equilibrium as a prediction of actual play in a game is that each player by imagining himself in the positions of his opponents will be able to figure out what these other players will play, and consequently the player himself will...

This paper presents a learning process which is a generalization of the method of fictitious play of Brown. If the learning process converges, the convergence point is a Nash equilibrium. We study 2 × 2 games. Here the process always converges. The relation between the initial prior, the weight...

We show that the standard trust question routinely used in social capital research is importantly related to cooperation behavior and we provide a microfoundation for this relation. We run a large-scale public goods experiment over the internet in Denmark and find that the trust question is a...

Building on Battigalli and Dufwenberg (2009)'s framework of dynamic psychological games and the recent progress in the modeling of dynamic unawareness, we provide a general framework that allows for `unawareness' in the strategic interaction of players motivated by belief-dependent psychological...