The mathematical framework of psychological game theory is useful for describing many forms of motivation where preferences depend directly on own or others’ beliefs. It allows for incorporating, e.g., emotions, reciprocity, image concerns, and self-esteem in economic analysis. We explain how and why, discussing basic theory, experiments, applied work, and methodology.

Belief-Dependent Motivations and Psychological Game Theory

Which social decisions are intuitive? Which are deliberative? The dual-process approach to human sociality has emerged in the last decades as a vibrant and exciting area of research. Here, I review the existing literature on the cognitive basis of cooperation, altruism, honesty, positive and negative reciprocity, and (act) utilitarianism. I conclude by introducing a game-theoretical framework that organizes the majority of the empirical regularities. This framework extends Rand and colleagues' Social Heuristics Hypothesis to any one-shot game $G$. The core assumption of this "General Social Heuristics Hypothesis" is that, under intuition, people play a Nash equilibrium of the "real analogue of $G$", $G^{real}$, while under deliberation people play a Nash equilibrium of $G$. $G^{real}$ differs from $G$ along two dimensions: $G$ is one-shot, while $G^{real}$ might be iterated; the payoffs of $G^{real}$ might be different from the payoffs of $G$, although they are ordered in (almost) the same way.

The dual-process approach to human sociality: A review

Frustration, aggression, and anger in leader-follower games

Psychological game theory (PGT), introduced by Geanakoplos et al. (1989) and significantly generalized by Battigalli and Dufwenberg (2009), extends the standard game theoretic framework by letting players’ utility at endnodes depend on their interactive beliefs. While it is understood that a host of applications that model and/or test the role of emotional and other psychological forces find their home in PGT, the framework is abstract and comprises complex mathematical objects, such as players’ infinite hierarchies of beliefs. Thus, PGT provides little guidance on how to model specific belief-dependent motivations and use them in game theoretic analysis. This paper takes steps to fill this gap. Some aspects are simplified – e.g., which beliefs matter – but others are refined and brought closer to applications by providing more structure. We start with belief-dependent motivations and show how to embed them in game forms to obtain psychological games. We emphasize the role of time and of the perception of players’ intentions. We take advantage of progress made on the foundations of game theory to expand and improve on PGT solution concepts.

Incorporating belief-dependent motivation in games

The mathematical framework of psychological game theory is useful for describing many forms of motivation where preferences depend directly on one’s own or others’ beliefs. It allows for incorporating, for example, emotions, reciprocity, image concerns, and self-esteem in economic analysis. We explain how and why, discussing basic theory, experiments, applied work, and methodology. (JEL C70, D83, D91)

Frustration and anger in the ultimatum game: an experiment

In social dilemmas, choices may depend on belief-dependent motivations enhancing the credibility of promises or threats at odds with personal gain maximization. We address this issue theoretically and experimentally in the context of the Ultimatum Minigame, assuming that the choice of accepting or rejecting an unfair proposal is affected by a combination of frustration, due to unfulfilled expectations, and inequity aversion. We increase the responder's payoff from the default allocation (the proposer's outside option) with the purpose of increasing the responder's frustration due to the unfair proposal, and thus his willingness to reject it. In addition, we manipulate the method of play, with the purpose of switching on (direct response method) and off (strategy method) the responder's experience of anger. Our behavioral predictions across and within treatments are derived from the theoretical model complemented by explicit auxiliary assumptions, without relying on equilibrium analysis. Keywords: Experiments, psychological games, ultimatum minigame, frustration, anger, non-equilibrium analysis. JEL classification: C72, C91, D03.

Frustration and Anger in the Ultimatum Game: An Experiment

I study the problem of persuading a boundedly rational agent without controlling or knowing the piece of information she observes. Persuasion occurs by providing models whereby the persuader can communicate ways of interpreting observable signals. The key assumption is that the agent adopts the model that best ﬁts what is observed, given her initial beliefs, and takes the action that maximizes her expected utility under the adopted model. I characterize the extent of belief manipulability in this setting and show that the agent may hold inconsistent beliefs across signal realizations — posterior beliefs across realizations do not average to the prior — because each signal may trigger the adoption of a diﬀerent model. While persuasion can mislead the agent, the extent to which she is vulnerable to it is driven by her initial beliefs. Polarization is inevitable if agents with suf-ﬁciently diﬀerent priors are exposed to the same conﬂicting models. I apply this framework to political polarization, conﬂict of interests in ﬁnance, lobbying, and self-persuasion.

Tailored Stories

Handle everyday research tasks with reliable, citation-backed results

Your personal Research Agent to handle research tasks with citation-backed results

Popular Tasks used by Researchers

How can I help with your research?

Meet SciSpace

Get more enhanced response by uploading the PDFs you want me to reference.

No relevant PDFs in your library

SciSpace is the AI research assistant for academics. Run systematic literature reviews on 280M+ papers, and write papers with cited sources. Trusted by 1M+ students, PhDs & researchers.

SciSpace | AI for Research

Analyze PDFs

Code & Manuscripts

Funding & Grants

Literature & Patents

Medical & Clinical Data

Systematic Review

Visualize & Present

Web & Data

Build a Google Scholar-like website for your research.

Build a website

Create charts and images for your research

Create a Chart

Write a paper for submission to a journal

Draft a manuscript

Patent Search

Design eye-catching scientific posters in minutes.

Scientific Poster Generation

Systematic Literature Review

One task is running at the moment. Your messages will be shown right after.

Drag and drop or click here to browse

Loved by <highlight>1 million+</highlight> researchers

Extract a list of specific topics and their sources from unstructured text

Topics

Compare and analyze relevant papers that matches with your search

Papers

Get insights from PDFs and bookmarked papers from your library

My library

Recent searches

Try searching for:

Catch AI-generated content in scholarly and non-scholarly content

{ai} Detector

Ai Writer

Get PDF Summaries, highlighted text explanations 

Chat with PDF

Effortlessly create in-text citations and bibliographies in APA and 2,500 other formats

Citation generator

Get explanations, summaries, and answers on academic papers

Ease up your research workflow with {scispace}'s cohort of exciting AI tools

Elevate your academic writing skills and convey your ideas the way you want

Paraphraser

Explore our range of reading and writing tools

Your file is being prepared and should be ready in a few minutes. If it's a large file, it might take a bit longer. You can close this window, and we'll email you the file when it's done.

You have reached a maximum limit of <strong>{limit}</strong> columns in the table. Remove at least <strong>1</strong> column to add or create another one.

Chiara Aina

Author Tools

Chat about Author

Papers

Frustration and anger in the ultimatum game: an experiment

Frustration and Anger in the Ultimatum Game: An Experiment

Tailored Stories