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Applying “theory of mind”: Theory and experiments

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  • Kimbrough, Erik O.
  • Robalino, Nikolaus
  • Robson, Arthur J.

Abstract

We investigate our capacity to attribute preferences to others. This ability is intrinsic to game theory, and is a central component of “Theory of Mind”, perhaps the capstone of social cognition. This component of theory of mind allows individuals to learn more rapidly in strategic environments with an element of novelty. We show that the capacity to attribute preferences yields an advantage over less sophisticated approaches to strategic interaction (e.g. reinforcement learning) because it allows agents to extrapolate to novel circumstances information about counterparts' preferences that was learned previously. We report experiments investigating this capacity in extensive form games. We find significant learning of others' preferences, providing evidence for the presence and effectiveness of this aspect of theory of mind. Moreover, scores on survey measures of autism-spectrum tendencies are significant determinants of individual learning, so our notion of theory of mind is related to the notion as understood in psychology.

Suggested Citation

  • Kimbrough, Erik O. & Robalino, Nikolaus & Robson, Arthur J., 2017. "Applying “theory of mind”: Theory and experiments," Games and Economic Behavior, Elsevier, vol. 106(C), pages 209-226.
    • Handle: RePEc:eee:gamebe:v:106:y:2017:i:c:p:209-226
    DOI: 10.1016/j.geb.2017.10.008
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    Cited by:

    1. Brice Corgnet & Mark DeSantis & David Porter, 2020. "Information Aggregation and the Cognitive Make-up of Traders," Working Papers 20-18, Chapman University, Economic Science Institute.
    2. Brice Corgnet & Mark Desantis & David Porter, 2018. "What Makes a Good Trader? On the Role of Intuition and Reflection on Trader Performance," Journal of Finance, American Finance Association, vol. 73(3), pages 1113-1137, June.
    3. Corgnet, Brice & DeSantis, Mark & Porter, David, 2021. "Information aggregation and the cognitive make-up of market participants," European Economic Review, Elsevier, vol. 133(C).

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    More about this item

    Keywords

    Theory of mind; Experiments; Preferences;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • D9 - Microeconomics - - Micro-Based Behavioral Economics

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