The Mythology of Game Theory

Proceedings of the International Conference on Social Computing, Behavioral-Cultural Modeling, & Prediction, Springer Lecture Notes in Computer Science

Marshall School of Business Working Paper No. FBE 01-12

8 Pages Posted: 6 Jan 2012 Last revised: 9 May 2012

Mathew D. McCubbins

Department of Political Science and Law School, Duke University

Mark B. Turner

Case Western Reserve University - Department of Cognitive Science

Nicholas Weller

University of California, Riverside (UCR)

Date Written: January 6, 2012

Abstract

Non-cooperative game theory is at its heart a theory of cognition, specifically a theory of how decisions are made. Game theory's leverage is that we can design different payoffs, settings, player arrays, action possibilities, and information structures, and that these differences lead to different strategies, outcomes, and equilibria. It is well-known that, in experimental settings, people do not adopt the predicted strategies, outcomes, and equilibria. The standard response to this mismatch of prediction and observation is to add various psychological axioms to the game-theoretic framework. Regardless of the differing specific proposals and results, game theory uniformly makes certain cognitive assumptions that seem rarely to be acknowledged, much less interrogated. Indeed, it is not widely understood that game theory is essentially a cognitive theory. Here, we interrogate those cognitive assumptions. We do more than reject specific predictions from specific games. More broadly, we reject the underlying cognitive model implicitly assumed by game theory.

Keywords: game theory, human behavior, Nash equilibrium, economics, Trust game, prediction markets

Suggested Citation

McCubbins, Mathew D. and Turner, Mark B. and Weller, Nicholas, The Mythology of Game Theory (January 6, 2012). Proceedings of the International Conference on Social Computing, Behavioral-Cultural Modeling, & Prediction, Springer Lecture Notes in Computer Science; Marshall School of Business Working Paper No. FBE 01-12 . Available at SSRN: https://ssrn.com/abstract=1980848 or http://dx.doi.org/10.2139/ssrn.1980848

Mathew D. McCubbins

Department of Political Science and Law School, Duke University ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States

Mark B. Turner

Case Western Reserve University - Department of Cognitive Science ( email )

10900 Euclid Avenue
Cleveland, OH 44106-7068
United States

HOME PAGE: http://markturner.org

Nicholas Weller (Contact Author)

University of California, Riverside (UCR) ( email )

900 University Avenue
Riverside, CA 92521
United States

Paper statistics

Downloads
545
Rank
39,900
Abstract Views
2,747