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Beyond Coincidence: The Reasoning Process Underlying Utility Proportional Beliefs Process

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  • Tobias Nauerz Christian

    (EpiCenter, P.O. Box 616, 6200 MDMaastricht, The Netherlands)

Abstract

We provide insights into (Bach, Christian W., and Andrés Perea’s. 2014. “Utility Proportional Beliefs.” International Journal of Game Theory: 1–22) concept of utility proportional beliefs and characterize its underlying reasoning process in normal-form games. Our analysis suggests that assumptions on the sensitivity to utilities influence players’ reasoning process and therefore the computations necessary to obtain a belief about the opponent. Under the assumption that more complex computations take longer to complete, we develop additional hypotheses about the players’ reaction times. These additional hypotheses allow for more rigorous testing of the concept than pure accordance with predictions. Using (Nauerz, Christian T., Marion Collewet, and Frauke Meyer. 2015. “Explaining Beliefs in Strictly Competitive One-shot Games.” Working Paper) data set we confirm our hypotheses about players’ reaction times, strengthening our trust in the concept.

Suggested Citation

  • Tobias Nauerz Christian, 2018. "Beyond Coincidence: The Reasoning Process Underlying Utility Proportional Beliefs Process," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 18(2), pages 1-13, July.
    • Handle: RePEc:bpj:bejtec:v:18:y:2018:i:2:p:13:n:12
    DOI: 10.1515/bejte-2016-0179
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    References listed on IDEAS

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    1. Jacob K. Goeree & Charles A. Holt, 2001. "Ten Little Treasures of Game Theory and Ten Intuitive Contradictions," American Economic Review, American Economic Association, vol. 91(5), pages 1402-1422, December.
    2. Mariana Blanco & Dirk Engelmann & Alexander Koch & Hans-Theo Normann, 2010. "Belief elicitation in experiments: is there a hedging problem?," Experimental Economics, Springer;Economic Science Association, vol. 13(4), pages 412-438, December.
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    More about this item

    Keywords

    Epistemic game theory; utility proportional beliefs; reasoning; experiment; bounded rationality;
    All these keywords.

    JEL classification:

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

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