This paper examines the role of simplified heuristics in the formation of preferences for public goods. Political scientists have suggested that voters use simplified heuristics based on the positions of familiar parties to infer how a proposed policy will affect them and to cast a vote in line...

The aim of the paper is to analyze the dynamic model of the Cournot duopoly game with bounded rationality associated to two firms. We consider the cost function of the first firm as nonlinear and for the second firm as linear. The players do not have a complete knowledge of the market and they...

We develop a general game-theoretic framework for reasoning about strategic agents performing possibly costly computation. In this framework, many traditional game-theoretic results (such as the existence of a Nash equilibrium) no longer hold. Nevertheless, we can use the framework to provide...

Transportation systems are complex sociotechnical systems and this dual nature is reflected in the literature dealing with their planning, i.e. defining courses of action from both public and private points of view. On the one hand, the social sciences literature makes it clear that most...

Given any observed finite sequence of prices, wealth and demand choices, we characterize the relation between its underlying Slutsky matrix norm (SMN) and some popular discrete revealed preference (RP) measures of departures from rationality, such as the Afriat index. We show that testing...

Mechanism design theory strongly relies on the concept of Nash equilibrium. However, studies of experimental games show that Nash equilibria are rarely played and that subjects may be thinking only a finite number of iterations. We study one of the most influential benchmarks of mechanism design...

I propose a dynamic game model that is consistent with the paradigm of bounded rationality. Its main advantages over the traditional approach based on perfect rationality are that: (1) the strategy space is a chain-complete partially ordered set; (2) the response function is certain...

We consider mechanism design in contexts in which agents exhibit bounded depth of reasoning (level k) instead of rational expectations. We use simple direct mechanisms, in which agents report only first-order beliefs. While level 0 agents are assumed to be truth tellers, level k agents...

Many proponents of deliberative democracy expect reasonable citizens to engage in rational argumentation. However, this expectation runs up against findings by behavioral economists and social psychologists revealing the extent to which normal cognitive functions are influenced by bounded...

The authors investigate the strategic rationale behind the message sent by Osama bin Laden on the eve of the 2004 U.S. Presidential elections. They model this situation as a signaling game in which a population of receivers takes a binary choice, the outcome is decided by majority rule, sender...