IDEAS home Printed from https://ideas.repec.org/p/mpg/wpaper/2008_34.html
   My bibliography  Save this paper

Playing strategically against nature? – Decisions viewed from a game-theoretic frame

Author

Listed:
  • Martin Beckenkamp

    (Max Planck Institute for Research on Collective Goods, Bonn)

Abstract

Common research on decision-making investigates non-interdependent situations, i.e., “games against nature”. However, humans are social beings and many decisions are made in social settings, where they mutually influence each other, i.e., “strategic games”. Mathematical game theory gives a benchmark for rational decisions in such situations. The strategic character makes psychological decision-making more complex by introducing the outcomes for others as an additional attribute of that situation; it also broadens the field for potential coordination and cooperation problems. From an evolutionary point of view, behavior in strategic situations was at a competitive edge. This paper demonstrates that even in games against nature, people sometimes decide as if they were in a strategic game; it outlines theoretical and empirical consequences of such a shift of the frame. It examines whether some irrationalities of human decision-making might be explained by such a shift in grasping the situation. It concludes that the mixed strategies in games against nature demand a high expertise and can only be found in situations where these strategies improve the effects of minimax-strategies that are used in cases of risk-aversion.

Suggested Citation

  • Martin Beckenkamp, 2008. "Playing strategically against nature? – Decisions viewed from a game-theoretic frame," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2008_34, Max Planck Institute for Research on Collective Goods.
  • Handle: RePEc:mpg:wpaper:2008_34
    as

    Download full text from publisher

    File URL: http://www.coll.mpg.de/pdf_dat/2008_34online.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Frank Heinemann & Rosemarie Nagel & Peter Ockenfels, 2009. "Measuring Strategic Uncertainty in Coordination Games," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(1), pages 181-221.
    2. Mark Walker & John Wooders, 2001. "Minimax Play at Wimbledon," American Economic Review, American Economic Association, vol. 91(5), pages 1521-1538, December.
    3. Ariel Rubinstein, 2007. "Instinctive and Cognitive Reasoning: A Study of Response Times," Economic Journal, Royal Economic Society, vol. 117(523), pages 1243-1259, October.
    4. Erev, Ido & Roth, Alvin E, 1998. "Predicting How People Play Games: Reinforcement Learning in Experimental Games with Unique, Mixed Strategy Equilibria," American Economic Review, American Economic Association, vol. 88(4), pages 848-881, September.
    5. Peter J. Boettke & David L. Prychitko (ed.), 1994. "The Market Process," Books, Edward Elgar Publishing, number 54.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jacek B. Krawczyk & Vladimir P. Petkov, 2022. "A Qualitative Game of Interest Rate Adjustments with a Nuisance Agent," Games, MDPI, vol. 13(5), pages 1-24, August.
    2. Justyna Hachoł & Elżbieta Bondar-Nowakowska & Paweł S. Hachaj, 2019. "Application of Game Theory against Nature in the Assessment of Technical Solutions Used in River Regulation in the Context of Aquatic Plant Protection," Sustainability, MDPI, vol. 11(5), pages 1-19, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Isabelle Brocas & Juan D. Carrillo, 2022. "The development of randomization and deceptive behavior in mixed strategy games," Quantitative Economics, Econometric Society, vol. 13(2), pages 825-862, May.
    2. Xie, Erhao, 2021. "Empirical properties and identification of adaptive learning models in behavioral game theory," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 798-821.
    3. Marek Hudik, 0. "Equilibrium as compatibility of plans," Theory and Decision, Springer, vol. 0, pages 1-20.
    4. Victor Aguirregabiria & Jihye Jeon, 2020. "Firms’ Beliefs and Learning: Models, Identification, and Empirical Evidence," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 56(2), pages 203-235, March.
    5. Spiliopoulos, Leonidas, 2013. "Beyond fictitious play beliefs: Incorporating pattern recognition and similarity matching," Games and Economic Behavior, Elsevier, vol. 81(C), pages 69-85.
    6. Van Essen, Matt & Wooders, John, 2015. "Blind stealing: Experience and expertise in a mixed-strategy poker experiment," Games and Economic Behavior, Elsevier, vol. 91(C), pages 186-206.
    7. Carlos Alós-Ferrer & Johannes Buckenmaier, 2021. "Cognitive sophistication and deliberation times," Experimental Economics, Springer;Economic Science Association, vol. 24(2), pages 558-592, June.
    8. Sean Duffy & J. J. Naddeo & David Owens & John Smith, 2024. "Cognitive Load and Mixed Strategies: On Brains and Minimax," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 26(03), pages 1-34, September.
    9. Andrew Schotter & Isabel Trevino, 2021. "Is response time predictive of choice? An experimental study of threshold strategies," Experimental Economics, Springer;Economic Science Association, vol. 24(1), pages 87-117, March.
    10. Cason, Timothy N. & Friedman, Daniel & Hopkins, Ed, 2010. "Testing the TASP: An experimental investigation of learning in games with unstable equilibria," Journal of Economic Theory, Elsevier, vol. 145(6), pages 2309-2331, November.
    11. Marek Hudik, 2020. "Equilibrium as compatibility of plans," Theory and Decision, Springer, vol. 89(3), pages 349-368, October.
    12. Robin Chark & Soo Chew, 2015. "A neuroimaging study of preference for strategic uncertainty," Journal of Risk and Uncertainty, Springer, vol. 50(3), pages 209-227, June.
    13. Leonidas Spiliopoulos, 2018. "Randomization and serial dependence in professional tennis matches: Do strategic considerations, player rankings and match characteristics matter?," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 13(5), pages 413-427, September.
    14. Victor Aguirregabiria, 2021. "Identification of firms’ beliefs in structural models of market competition," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(1), pages 5-33, February.
    15. Friedman, Daniel & Zhao, Shuchen, 2021. "When are mixed equilibria relevant?," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 51-65.
    16. Masiliūnas, Aidas, 2017. "Overcoming coordination failure in a critical mass game: Strategic motives and action disclosure," Journal of Economic Behavior & Organization, Elsevier, vol. 139(C), pages 214-251.
    17. Ofer Azar & Michael Bar-Eli, 2011. "Do soccer players play the mixed-strategy Nash equilibrium?," Applied Economics, Taylor & Francis Journals, vol. 43(25), pages 3591-3601.
    18. Bruttel, Lisa & Friehe, Tim, 2015. "A note on making humans randomize," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 58(C), pages 40-45.
    19. Jim Engle-Warnick & Ed Hopkins, 2006. "A Simple Test of Learning Theory," Levine's Bibliography 321307000000000724, UCLA Department of Economics.
    20. Erhao Xie, 2019. "Monetary Payoff and Utility Function in Adaptive Learning Models," Staff Working Papers 19-50, Bank of Canada.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mpg:wpaper:2008_34. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marc Martin (email available below). General contact details of provider: https://edirc.repec.org/data/mppggde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.