Devetag, Giovanna and Warglien, Massimo (2002) Representing others' preferences in mixed motive games: was Schelling right? UNSPECIFIED. (Unpublished)
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Abstract
The available experimental evidence suggests that even two-person normal form games with an elementary action space present substantial degrees of cognitive difficulty. We submit that the relational structure of the players' preferences is a source of complexity of a game. We provide a formal classication of order structures in two-person normal form games, based on the two properties of monotonicity and projectivity, and present an experiment on individual ability to construct a representation of bi-ordered sets isomorphic to the preference structure of paradigmatic normal form games. Experimental results support the hypothesis that relational complexity matters. In particular, they support Schelling's intuition that `mixed motive games' are harder to represent than `pure motive' ones. In addition, the experiment shows that most subjects tend to perceive and extract monotonic relations from non-projective ones. We show that individuals' short term memory capacity limitations signicantly affect their ability to correctly represent bi-orders. Some connections with Rubinstein's analysis of binary relations in natural language are also shortly discussed. JEL codes: C70, C72
Item Type: | Departmental Technical Report |
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Department or Research center: | CEEL (Computable and Experimental Economics Laboratory) |
Subjects: | Q Science > QA Mathematics > QA269 Game theory H Social Sciences > HB Economic Theory |
Uncontrolled Keywords: | pure motive - mixed motive - preferences - bi-orders language - cognition - pro-jectivity - monotonicity - short term memory - experiments |
Report Number: | 8 |
Repository staff approval on: | 19 Jan 2011 |
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