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Center for Nonlinear Studies |
We introduce a framework that explains non-rationality in non-repeated games. In our framework a player $i$ adopts a binding "persona" --- a temporary utility function --- that they honestly signal before play. By adopting a "non-rational" persona, $i$ may cause changes in their opponents' behavior that increases $i$'s true utility. We use this framework to explain experimental data in the Traveler's Dilemma and to show how cooperation can arise in the Prisoner's Dilemma (PD). We then predict a crowding out phenomenon in the PD. We also predict a tradeoff between the robustness and the benefit of cooperation in the PD.
Host: Misha Chertkov