Nashbots: How Political Scientists Have Underestimated Human Rationality, and How to Fix It

18 Pages Posted: 28 Nov 2016 Last revised: 8 Feb 2017

See all articles by Daniel P. Enemark

Daniel P. Enemark

University of Southern California - Marshall School of Business

Mathew D. McCubbins

Department of Political Science and Law School, Duke University

Mark B. Turner

Case Western Reserve University - Department of Cognitive Science

Date Written: November 23, 2016

Abstract

Political scientists use experiments to test the predictions of game-theoretic models. In a typical experiment, each subject makes choices that determine her own earnings and the earnings of other subjects, with payments corresponding to the utility payoffs of a theoretical game. But social preferences distort the correspondence between a subject’s cash earnings and her subjective utility, and since social preferences vary, anonymously matched subjects cannot know their opponents’ preferences between outcomes, turning many laboratory tasks into games of incomplete information. We reduce the distortion of social preferences by pitting subjects against algorithmic agents (“Nashbots”). Across 11 experimental tasks, subjects facing human opponents played rationally only 36% of the time, but those facing algorithmic agents did so 60% of the time. We conclude that experimentalists have underestimated the economic rationality of laboratory subjects by designing tasks that are poor analogies to the games they purport to test.

Suggested Citation

Enemark, Daniel P. and McCubbins, Mathew D. and Turner, Mark B., Nashbots: How Political Scientists Have Underestimated Human Rationality, and How to Fix It (November 23, 2016). Duke Law School Public Law & Legal Theory Series No. 2017-10. Available at SSRN: https://ssrn.com/abstract=2875153 or http://dx.doi.org/10.2139/ssrn.2875153

Daniel P. Enemark (Contact Author)

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA 90089
United States

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

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