Strategic Cognition and Social Preferences

How do humans take decisions when in a strategic situation?  In a strategic situation, the consequences of one's decision

(1) are partly determined by the decisions of some other individuals

(2) will affect others' thoughts and behaviors

In this research course, we will read and discuss papers about the psychological factors that underpin decision making in strategic situations.

We will mainly draw on the literature in behavioural game theory ‑‑ a sub‑field of behavioural economics. We will highlight the specifics of this research field, and examine the strength and weaknesses of its experimental method. We will also read papers from cognitive and evolutionary psychology, and from economic anthropology.

What are the psychological mechanisms that permit humans to deal with strategic situations, modulating their behaviors in accordance with the specifics of the situation and the interaction partners? Taking decisions that involve others' choices and payoffs requires making inferences about partners' intentions, preferences and beliefs, forming accurate expectations and then acting accordingly. There is presumably a set of human specific cognitive mechanisms, desires and emotions that are at work when taking decisions in strategic situations and that are therefore most relevant to the study of human social behaviour. For instance, strategic decision‑making processes arguably involve caring about others' thoughts and welfare as well as about one's own welfare.

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Some key questions:

How much do we have to depart from the standard model of the economic agent in order to provide a more realistic account of human strategic decision making? For instance, one such departure consists in asserting the existence of other regarding preferences; another one consists in asserting that agents' reasoning abilities are biased, while yet another one advocates focusing on "ecological" rationality.

To what extent are humans endowed with domain specific cognitive capacities for dealing with social interactions and how can we discover what those capacities are?

Methodological question: what are the specifics of experimental economics versus social psychology and cognitive psychology? How can we enrich the methods of experimental economics?