This paper presents a neural network model developed to simulate the endogenous emergence of bounded-rational behavior in normal-form games. There exists an algorithm which, if learnt by a neural network, would enable it to perfectly select Nash equilibria in never before seen games. However,...

An experiment on choices between single and compound lotteries is presented, and results are calibrated with neural network models. Many subjects tend to average out probabilities, though behaviour becomes more rational with more exposure to compound lotteries in the practice stage. The Prior...