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DR@W Forum - Peter Hammond (Stanford University and University of 糖心TV) and Ganna Pogrebna (University of Sheffield)
Peter Hammond (Stanford University and University of 糖心TV) and Ganna Pogrebna (University of Sheffield)
Beliefs in Games
Orthodox game theory fails miserably as a model for predicting behaviour, especially in laboratory games, where players are often observed to choose dominated strategies. While many explanations have been offered, there is another that seems to have received too little attention. This retains the key hypothesis that players' behaviour can be described using a probabilistically sophisticated model of individual choice. But players are allowed to condition their beliefs over other players' strategies on their own strategy choices, thus rationalizing even dominated strategies. In order to test this approach, we need to expand the typical game theoretic experiment by eliciting players' beliefs. The latter part of the talk will discuss the pros and cons of several different methods for doing this. In the time remaining, we hope to have an open discussion about theoretical and empirical aspects of using beliefs to explain and predict behaviour in games.