This paper provides a comprehensive analysis regarding strategic interaction under expectation-based loss-aversion. First, we develop a coherent framework for the analysis by extending the equilibrium concepts of Koszegi and Rabin (2006, 2007) to strategic interaction and demonstrate how to...

The "grammar of trust" is one the most explored loci in game theory and behavioural economics. However, still much needs to be understood about the nature of trust in non-enforceable, personalised interactions, in markets and within organizations. This experimental study aims at contributing to...

This paper examines the reflexive interplay between individual decisions and social forces to analyze the evolution of cooperation in the presence of "multi-directedness," whereby people's preferences depend on their psychological motives. People have access to multiple, discrete motives....

A simple expression is derived for the optimal strategy in the minimum effort game. This maps from player beliefs to an optimal effort level. From this expression the set of Nash equilibria in the game is fully characterized. All Nash equilibria are symmetric and involve at most two actions...

The Verifiability Approach is a lie detection method based on the insight that truth-tellers provide precise details whereas liars sometimes remain vague to avoid being exposed. We provide a-game-theoretic analysis of a speaker who wants to be acquitted and an investigator who prefers to find...

Anchoring is a robust behavioral phenomenon modeled predominantly as a bias in individual judgment. We propose a game-theoretic model that considers players' beliefs about others' behavior as a mediator for the effect of the anchor on a player's choice. The results establish that anchoring in...

We propose a framework in order to econometrically estimate case-based learning and apply it to empirical data from twelve 2 × 2 mixed strategy equilibria experiments. Case-based learning allows agents to explicitly incorporate information available to the experimental subjects in a simple,...

We seek an evolutionary explanation for why in some situations humans maintain either optimistic or pessimistic attitudes towards uncertainty and are ignorant to relevant aspects of their environment. Players in strategic games face Knightian uncertainty about opponents' actions and maximize...

We present an interactive eye-tracking study that explores the strategic use of gaze. We analyze gaze behavior in an experiment with four simple games. The game can either be a competitive (hide & seek) game in which players want to be unpredictable, or a game of common interest in which players...

Declining general trust has become a serious social issue in China in recent years. This paper attempts to understand and analyze this social phenomenon from a social interaction perspective. Based on a repeated prisoners´ dilemma game on networks, it finds that the evolution of general trust...