The most fundamental solution concepts in Game Theory Nash equilibrium, backward induction, and iterated elimination of dominated strategies are based on the assumption that people are capable of predicting others' actions. These concepts require people to be able to view the game from the other...

Individuals in most industrialized countries have to make investment decisions throughout their adult life span to save for their retirement. These decisions substantially affect their living standards in old age. Research on cognitive aging has already demonstrated several changes in cognitive...

We propose that individuals consider future versions of themselves to truly be separate persons, not simply as a convenient modeling device but in terms of actual brain systems and decision]making processes. Intertemporal choices are thus quite literally strategic interactions between multiple...

Although decision makers are often reported to have difficulties in making comparisons between multi-dimensional decision outcomes, economic theory assumes a uni-dimensional utility measure. This paper reviews evidence from behavioral and brain sciences to assess whether, and for what reasons,...

Neuroeconomics focuses on brain imaging studies mapping neural responses to choice behavior. Economic theory is concerned with choice behavior but it is silent on neural activities. We present a game theoretic model in which players are endowed with an additional structure - a simple ``nervous...