Behavioral Game Theory

Game theory is a mathematical tool to describe and analyze situations of conflict, cooperation, and coordination. In rational player models it is typically assumed that players are highly rational beings who completely understand the strategic situation and who always maximize their consistent preferences given their rationally formed beliefs about the behavior of their opponents. At the opposite extreme, in evolutionary models, players have no cognition and therefore “no choice” but are “programmed strategies” that survive or go extinct in an evolutionary contest. By contrast, the approach of behavioral game theory (BGT) is to seek empirical information about how human beings – as opposed to highly rational beings or programmed strategies – behave in strategic situations. Thus, BGT takes the middle ground between these two extremes but builds on the great advances of formal game theory, without which BGT would not exist. BGT aims to answer the following research questions:

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