Models of Strategic Reasoning

There is a growing body of literature that analyzes games in terms of the “process of deliberation” that leads the players to select their component of a rational outcome. Although the details of the various models of deliberation in games are different, they share a common line of thought: The rational outcomes of a game are arrived at through a process in which each player settles on an optimal choice given her evolving beliefs about her own choices and the choices of her opponents. The goal is to describe deliberation in terms of a sequence of belief changes about what the players are doing or what their opponents may be thinking. The central question is: What are the update mechanisms that match different game-theoretic analyses? The general conclusion is that the rational outcomes of a game depend not only on the structure of the game, but also on the players’ initial beliefs, which dynamical rule is being used by the players to update their inclinations (in general, different players may be using different rules), and what exactly is commonly known about the process of deliberation.