The Evolution of Strategic Sophistication

This paper investigates the evolutionary foundation for our ability to attribute preferences to others, an ability that is central to conventional game theory. We argue here that learning others' preferences allows individuals to efficiently modify their behavior in strategic environments with...

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Bibliographic Details
Published in:The American economic review 2016-04, Vol.106 (4), p.1046-1072
Main Authors: Robalino, Nikolaus, Robson, Arthur
Format: Article
Language:English
Subjects:
Economics
Evolution
Game theory
Learning
Preferences
Studies
Utility functions
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Summary:This paper investigates the evolutionary foundation for our ability to attribute preferences to others, an ability that is central to conventional game theory. We argue here that learning others' preferences allows individuals to efficiently modify their behavior in strategic environments with a persistent element of novelty. Agents with the ability to learn have a sharp, unambiguous advantage over those who are less sophisticated because the former agents extrapolate to novel circumstances information about opponents' preferences that was learned previously. This advantage holds even with a suitably small cost to reflect the additional cognitive complexity involved.
ISSN:0002-8282
1944-7981
DOI:10.1257/aer.20140105