We argue that the introduction of memory imperfections into models of economic decision making creates a natural role for anticipatory emotions. The combination of memory imperfections and anticipatory emotions has striking behavioral implications. The first half of the paper shows that agents can rationally select dominated strategies. We consider two applications: Newcomb’s Paradox and the Pr...

This paper extends the literature on individual versus group decision-making by combining a strategic inter-group game with an intra-group voting mechanism. The intergroup game is a simple Prisoners’ Dilemma, while we consider two versions of an intragroup voting mechanism—a form of representative democracy and a majority vote. Our results suggest that players tend to be more cooperative in the...

A population of individuals is divided into groups. Individuals are recurrently randomly matched with individuals from their group to play a generic symmetric 2-player game. Deterministic interand intragroup dynamics are derived from a model of individual imitation within groups and individual migration between groups. Conditions are identified under which subsets (components) of the set of sta...

Suppose that a large number of individuals are randomly matched into groups where each group plays a finite symmetric game. Individuals breed true according to their individual material payoffs, but the expected number of surviving offspring may depend on the material payoff vector to the whole group. We show that the mean-field equation for the induced population dynamic is equivalent to the r...

We investigate experimentally the possibility of cooperation in a sequential prisoners' dilemma game under the conditions identified by Nishihara (1997). He shows for (a subclass of) n-person prisoners' dilemma games that when players move sequentially, but the order of moves is not known, full cooperation can be attained in a Nash equilibrium under an information structure allowing for trigger...

Standard equilibrium concepts in game theory find it difficult to explain the empirical evidence from a large number of static games, including the prisoners’ dilemma game, the hawk-dove game, voting games, public goods games and oligopoly games. Under uncertainty about what others will do in one-shot games, evidence suggests that people often use evidential reasoning (ER), i.e., they assign di...

This paper investigates the Harsanyi (1973)-purifiability of mixed strategies in the repeated prisoners’ dilemma with perfect monitoring. We perturb the game so that in each period, a player receives a private payoff shock which is independently and identically distributed across players and periods. We focus on the purifiability of one-period memory mixed strategy equilibria used by Ely and Vä...