In a variety of behavioral tasks, subjects exhibit an automatic and apparently suboptimal sequential effect: they respond more rapidly and accurately to a stimulus if it reinforces a local pattern in stimulus history, such as a string of repetitions or alternations, compared to when it violates such a pattern. This is often the case even if the local trends arise by chance in the context of a r...

The area of mechanism design is fundamental to economics and game theory. Research in this area is concerned with the design of multi-agent interactions in ways that lead rational agents to desired behavior [Fudenberg and Tirole, 1991; Kreps, 19901. The design of protocols is fundamental to Computer Science, and is concerned with the design of multiagent interactions in computational settings, ...

We define a “hot potato” to be an exchange good which may be traded a finite number of times, and which becomes a bad if and when it can no longer be exchanged. Under standard assumptions of rationality and common knowledge, it is easy to show that no rational actor would freely accept a hot potato good, irrespective of the magnitude of the good’s exchange payoff or its last-holder penalty. Bou...

Basic games, where each individual chooses between two strategies, illustrate several issues that immediately emerge from the standard approach that applies strategic reasoning, based on rational decisions, to predict population behavior where no rationality is assumed. These include how mutual cooperation (which corresponds to the best outcome from the population perspective) can evolve when t...

Human behavior is not always consistent with standard rational choice predictions. Apparent deviations from rational choice predictions provide a promising arena for the merger of economics and biology [1-6]. Although little is known about the extent to which other species exhibit these seemingly irrational patterns [7-9], similarities across species would suggest a common evolutionary root to ...

Article history: Received 19 July 2006 Received in revised form 6 May 2008 Accepted 26 May 2008 Available online 2 July 2008 The role of automated agents for decision support in the electronic marketplace has been growing steadily and has been attracting a lot of research from the artificial intelligence community as well as from economists. In this paper, we study the efficacy of using automat...

Abstract We study the effects of audits on long run compliance behavior using a random audit program covering more than 53,000 tax returns. find that raise reported liabilities for five years after audit, are longer-lasting stable sources income, and only individuals found to have made errors respond audit. A total 60%–65% revenue from comes change in reporting behavior. Extending standard mode...

Investors behavior is one of the most important discussion of the financial science in the financial market. Individual investors consider various factors when they buy and sell securities and show different behavior (Rational, Herding, Reaction and Heuristic). The main purpose of this research is to identify and categorize factors which impact individual investors behavior that are known as be...

Human behavior is one of the main problems for evolution, as it is often the case that human actions are disadvantageous for the self and advantageous for other people. Behind this puzzle are our beliefs about rational behavior, based on game theory. Here we show that by going beyond the standard game-theoretical conventions, apparently altruistic behavior can be understood as self-interested. ...