Strategic Choice of Preferences: The Persona Model

60 Pages Posted: 16 Oct 2010

See all articles by David Wolpert

David Wolpert

Santa Fe Institute

Julian C. Jamison

University of Exeter Business School - Department of Economics; World Bank eMBeD (Mind, Behavior, and Development); Massachusetts Institute of Technology (MIT) - Abdul Latif Jameel Poverty Action Lab (J-PAL); Innovations for Poverty Action

David Newth

Government of the Commonwealth of Australia - CSIRO (Commonwealth Scientific and Industrial Research Organisation)

Michael Harre

affiliation not provided to SSRN

Date Written: September 24, 2010

Abstract

We introduce a modification to the two-timescale games studied in the evolution of preferences (EOP) literature. In this modification, the strategic process occurring on the long timescale is learning by an individual across his or her lifetime, not natural selection operating on genomes over multiple generations. This change to the longer timescale removes many of the formal difficulties of EOP models and allows us to show how two-timescale games can provide endogenous explanations for why humans sometimes adopt interdependent preferences and sometimes exhibit logit quantal response functions. In particular, we show that our modification to EOP explains experimental data in the Traveler's Dilemma. We also use our modification to show how cooperation can arise in nonrepeated versions of the Prisoner's Dilemma (PD). We then show that our modification to EOP predicts a "crowding out" phenomenon in the PD, in which introducing incentives to cooperate causes players to stop cooperating instead. We also use our modification to predict a tradeoff between the robustness and the benefit of cooperation in the PD.

Keywords: Nonrationality, Single-Shot Games, Prisoner’s Dilemma, Traveler’s Dilemma, Schelling, Emotions

JEL Classification: C70, C72, D03

Suggested Citation

Wolpert, David and Jamison, Julian C. and Newth, David and Harre, Michael, Strategic Choice of Preferences: The Persona Model (September 24, 2010). FRB of Boston Working Paper No. 10-10. Available at SSRN: https://ssrn.com/abstract=1692757 or http://dx.doi.org/10.2139/ssrn.1692757

David Wolpert

Santa Fe Institute ( email )

1399 Hyde Park Road
Santa Fe, NM 897501
United States

Julian C. Jamison (Contact Author)

University of Exeter Business School - Department of Economics ( email )

Streatham Court
Exeter, EX4 4RJ
United Kingdom

World Bank eMBeD (Mind, Behavior, and Development) ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Massachusetts Institute of Technology (MIT) - Abdul Latif Jameel Poverty Action Lab (J-PAL) ( email )

30 Wadsworth Street, E53-320
77 Massachusetts Avenue
Cambridge, MA 02142
United States

Innovations for Poverty Action ( email )

1731 Connecticut Ave, 4th floor
New Haven, CT 20009
United States

David Newth

Government of the Commonwealth of Australia - CSIRO (Commonwealth Scientific and Industrial Research Organisation) ( email )

41 Boggo Rd
Dutton Park, Queensland
Australia

Michael Harre

affiliation not provided to SSRN ( email )

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