This article reports experimental tests of two alternative explanations of how players use focal points to select equilibria in one-shot coordination games. Cognitive hierarchy theory explains coordination as the result of common beliefs about players' pre-reflective inclinations towards the...

There is some evidence that, as individuals participate in repeated markets, "anomalies" tend to disappear. One interpretation is that individuals — particularly marginal traders — are learning to act on underlying preferences which satisfy standard assumptions. An alternative...

Preference reversal is often explained as an information-processing effect, whereby individuals respond differently to valuation problems than to straight choices. Regret theory offers the alternative explanation that individuals act on consistent, but nontransitive, preferences. Regret theory,...

This paper defines the concept of a justifiable strategy, that of a justification theory (which shows strategies to be justifiable) and that of a complete justification theory (which for every strategy shows whether it is justifiable or not). An impossibility result is proved, showing that there...

This paper looks at the philosophical foundations of rational-choice theory. It is argued that L. Savage's expected-utility axioms cannot be defended as requirements of instrumental rationality, in part because of their implications for the description of consequences. Then it is argued that...