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Behavioral Polymorphism in Bayesian Games

Author

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  • Raul V. Fabella

    (School of Economics, University of the Philippines Diliman
    National Academy of Science and Technology)

Abstract

J. Harsanyi introduced structural polymorphism in game theory, that is, there are many possible agent types such as "low productivity or high productivity" with corresponding probability but all operating under one behavioral type, strict rationality. In this paper, we introduce behavioral polymorphism into Bayesian games. The multiplicity of behavioral types have become increasingly recognized and studied. Agents ascribe to each other a probability distribution across the possible types. They then choose the appropriate type as response to the possible type of the others which type determines the choice of strategy. We show in a dimorphic game model with the two types being strict rationality (SR) and utilitarian altruist (UA) that there always is a high enough assignment such that cooperation is the dominant strategy for both players in initially social dilemma games. Thus, the strategy set is endogenous in games with behavioral polymorphism. We argue that the assignment is based on some heuristics such as the counter-parties’ membership in some groups.

Suggested Citation

  • Raul V. Fabella, 2016. "Behavioral Polymorphism in Bayesian Games," UP School of Economics Discussion Papers 201603, University of the Philippines School of Economics.
    • Handle: RePEc:phs:dpaper:201603
    as

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    File URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1490
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    References listed on IDEAS

    as
    1. Elinor Ostrom, 2000. "Collective Action and the Evolution of Social Norms," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 137-158, Summer.
    2. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    3. Gerd Gigerenzer & Reinhard Selten (ed.), 2002. "Bounded Rationality: The Adaptive Toolbox," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262571641, December.
    4. John C. Harsanyi, 1967. "Games with Incomplete Information Played by "Bayesian" Players, I-III Part I. The Basic Model," Management Science, INFORMS, vol. 14(3), pages 159-182, November.
    5. Daniel Kahneman, 2003. "Maps of Bounded Rationality: Psychology for Behavioral Economics," American Economic Review, American Economic Association, vol. 93(5), pages 1449-1475, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    behavioral polymorphism; Bayesian games; cooperation; dominant strategy;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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