This paper extends our earlier work on reverse Bayesianism by relaxing the assumption that decision makers abide by expected utility theory, assuming instead weaker axioms that merely imply that they are probabilistically sophisticated. We show that our main results, namely, (modified) representation theorems and corresponding rules for updating beliefs over expanding state spaces and null even...

In three experiments we examine the extent to which strategic sophistication (i.e., inductive reasoning, iterative dominance and level-k thinking) is determined by broader cognitive skills. In the first experiment we replicate previous results showing strong associations between cognitive ability and sophistication in a game of iterative dominance. We then extend the results to a game requiring...

We revisit the notion of computational depth and sophistication for infinite sequences and study the density of the sets of deep and sophisticated infinite sequences. Koppel defined the sophistication of an object as the length of the shortest total program that given some data as input produces it and the sum of the size of the program with the size of the data is as consice as the smallest de...

Cognitive capacities differ among individuals. Experimentally observed behavior often shows significant inter-individual differences in decision making, and this observation has given rise to a rich literature developing theories endowing individuals with different levels of strategic sophistication or reasoning capability. Such models of iterative thinking (Stahl 1993; Stahl and Wilson 1995; H...

Machina and Schmeidler [Econometrica, 60 (1992) 745–780] gave preference conditions for probabilistic sophistication, i.e. decision making where uncertainty can be expressed in terms of (subjective) probabilities without commitment to expected utility maximization. This note shows that simpler and more general results can be obtained by combining results from qualitative probability theory with...

Abstract. This paper investigates the evolutionary foundation for our ability to attribute preferences to others, an ability that is central to conventional game theory. We argue here that learning others’ preferences allows individuals to efficiently modify their behavior in strategic environments with a persistent element of novelty. Agents with the ability to learn have a sharp, unambiguous ...

While the relationship between information technology (IT) and organizational structure has long been a focus of research from a descriptive and prescriptive point of view, few solid results have been found as of yet linking this relationship to enterprise level performance. This can be attributed to problems related to the definition and measurement of IT, performance and "fit" between technol...