Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Behavioral Game Theory and Contemporary Economic Theory

Behavioral Game Theory and Contemporary Economic Theory Abstract It is widely believed that experimental results of behavioral game theory undermine standard economic and game theory. This paper suggests that experimental results present serious theoretical modeling challenges, but do not undermine two pillars of contemporary economic theory: the rational actor model, which holds that individual choice can be modeled as maximization of an objective function subject to informational and material constraints, and the incentive compatibility requirement, which holds that macroeconomic quantities must be derived from the interaction and aggregation of individual choices. However, we must abandon the notion that rationality implies self-regarding behavior and the assumption that contracts are costlessly enforced by third parties. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Analyse & Kritik de Gruyter

Behavioral Game Theory and Contemporary Economic Theory

Analyse & Kritik , Volume 27 (1): 25 – May 1, 2005

Loading next page...
 
/lp/de-gruyter/behavioral-game-theory-and-contemporary-economic-theory-igDS2ZQgAt

References (86)

Publisher
de Gruyter
Copyright
© 2005 by Lucius & Lucius, Stuttgart
ISSN
0171-5860
DOI
10.1515/auk-2005-0102
Publisher site
See Article on Publisher Site

Abstract

Abstract It is widely believed that experimental results of behavioral game theory undermine standard economic and game theory. This paper suggests that experimental results present serious theoretical modeling challenges, but do not undermine two pillars of contemporary economic theory: the rational actor model, which holds that individual choice can be modeled as maximization of an objective function subject to informational and material constraints, and the incentive compatibility requirement, which holds that macroeconomic quantities must be derived from the interaction and aggregation of individual choices. However, we must abandon the notion that rationality implies self-regarding behavior and the assumption that contracts are costlessly enforced by third parties.

Journal

Analyse & Kritikde Gruyter

Published: May 1, 2005

There are no references for this article.