Traditional game-theoretic models assume that utilities depend only on actions. This is not sufficient for describing the motivations and choices of decision makers who care about reciprocity, emotions, or social rewards. Psychological games allow utilities to depend directly on beliefs (about beliefs) in addition to which actions are chosen, and they can capture a wider range of motivations. This article contains several examples and it is indicated where research on psychological games is headed.
Allais Paradox Belief-Dependent Motivation Commitment Decision Theory Emotions Extensive Game Forms Game Theory Guilt Aversion Psychological Forward Induction Psychological Games Reciprocity Signalling Trust Von Neumann and Morgenstern
This is a preview of subscription content, log in to check access
Bacharach, M., G. Guerra, and D. Zizzo. 2007. The self-fulfilling property of trust: An experimental study. Theory and Decision 63: 349–388.CrossRefGoogle Scholar
Battigalli, P., and M. Dufwenberg. 2005. Dynamic psychological games. Working Paper No. 287, IGIER, Bocconi University.Google Scholar
Battigalli, P., and M. Dufwenberg. 2007. Guilt in games. American Economics Review 97: 170–176.CrossRefGoogle Scholar
Battigalli, P., and M. Siniscalchi. 1999. Hierarchies of conditional beliefs and interactive epistemology in dynamic games. Journal of Economic Theory 88: 188–230.CrossRefGoogle Scholar
Bell, D. 1985. Disappointment in decision making under uncertainty. Operations Research 33: 1–27.CrossRefGoogle Scholar