Models Of Strategic Rationality

The papers collected in this volume relate to game theory. They aim at the elaboration and discussion of basic con cepts, at the analysis of specific applied models and at the evaluation of experimental evidence. A game is a mathematical model of a situation where several actors with different goals are engaged in strategic inter action. Game theory explores the nature and the consequence. s of rational behavior in games. With respect to several papers in this volume, it seems to be appropriate to comment on later developments. A list of some important references is given at the end of the intro duction. References already included in the collected pa pers are not repeated here. In casual conversation colleagues sometimes observe that the author on the one hand goes to extremes in the elabora tion of the consequences of Bayesian rationality and on the other hand strongly emphasizes the limited rationality of actual decision behavior. This seeming discrepancy is also expressed in the collection presented here. The author thinks that a sharp distinction should be made between nor ~ative and descriptive game theory. This position of "methodological dualism" has been expressed in a comment to Aumann's paper "What is game theory trying to accomplish?" (Aumann, 1985, Selten 1985) Normative game theory has the important task to explore the nature and the consequences of idealized full rationality in strategic interaction. This requires a thorough discuss ion of first principles. Empirical arguments are irrelevant here.

Links the theory of strategic management with the general theory of rationality.

Strategic behavior is the key to social interaction, from the ever-evolving world of living beings to the modern theatre of designed computational agents. Strategies can make or break participants’ aspirations, whether they are selling a house, playing the stock market, or working toward a treaty that limits global warming. This book aims at understanding the phenomenon of strategic behavior in its proper width and depth. A number of experts have combined forces in order to create a comparative view of the different frameworks for strategic reasoning in social interactions that have been developed in game theory, computer science, logic, linguistics, philosophy, and cognitive and social sciences. The chapters are organized in three topic-based sections, namely reasoning about games; formal frameworks for strategies; and strategies in social situations. The book concludes with a discussion on the future of logical studies of strategies.

The purpose of this book is to develop a framework for analyzing strategic rationality, a notion central to contemporary game theory, which is the formal study of the interaction of rational agents, and which has proved extremely fruitful in economics, political theory, and business management. The author argues that a logical paradox (known since antiquity as "the Liar paradox") lies at the root of a number of persistent puzzles in game theory, in particular those concerning rational agents who seek to establish some kind of reputation. Building on the work of Parsons, Burge, Gaifman, and Barwise and Etchemendy, Robert Koons constructs a context-sensitive solution to the whole family of Liar-like paradoxes, including, for the first time, a detailed account of how the interpretation of paradoxial statements is fixed by context. This analysis provides a new understanding of how the rational agent model can account for the emergence of rules, practices, and institutions.

In recent decades, rational choice theory has emerged as the single most powerful, controversial claimant to provide a unified, theoretical framework for all the social sciences. In its simplest form, the theory postulates that humans are purposive beings who pursue their goals in a rational, efficient manner, seeking the greatest benefit at the lowest cost. This volume brings together prominent scholars working in several social science disciplines and the philosophy of science to debate the promise and problems of rational choice theory. As rational choice theory has spread from its home base in economics to other disciplines, it has come under fierce criticism. To its critics, the extension of the explanatory model mistakenly assumes that the logic of economic rationality can explain non-economic behavior and, at its worst, commits the ethnocentric error of imposing Western concepts of rationality on non-Western societies and cultures. This volume includes strong advocates as well as forceful critics of the rational choice approach. However, in contrast to previous debates, all the contributors share a commitment to open, constructive and knowledgeable dialogue. Well-known advocates of rational choice theory (Michael Hechter, Michael Smith, Chris Manfredi) explicitly ponder some of its serious limitations, while equally well-known critics (Ian Shapiro, Mario Bunge) strike a surprisingly conciliatory tone in contemplating its legitimate uses. Vociferous critics of neoclassical economics (Bunge) favorably discuss sociological proponents of rational choice theory while two economists who are not particularly anti-mainstream (Robin Rowley, George Grantham) critically assess the problems of such assumptions in their discipline. Philosophers (Storrs McCall) and sociologists (John Hall) alike reflect on the variable meaning of rationality in explaining social behavior. In the introduction and conclusion, the editors survey the current state of the debate and show how open, constructive dialogue enables us to move beyond hackneyed accusations and dismissals that have characterized much previous debate.

Understanding Foreign Policy Decision Making presents a psychological approach to foreign policy decision making. This approach focuses on the decision process, dynamics, and outcome. The book includes a wealth of extended real-world case studies and examples that are woven into the text. The cases and examples, which are written in an accessible style, include decisions made by leaders of the United States, Israel, New Zealand, Cuba, Iceland, United Kingdom, and others. In addition to coverage of the rational model of decision making, levels of analysis of foreign policy decision making, and types of decisions, the book includes extensive material on alternatives to the rational choice model, the marketing and framing of decisions, cognitive biases, and domestic, cultural, and international influences on decision making in international affairs. Existing textbooks do not present such an approach to foreign policy decision making, international relations, American foreign policy, and comparative foreign policy.

"This book is refreshing, innovative and important for several reasons. Perhaps most importantly, it attempts to reconcile game theory with one-person decision theory by viewing a game as a collection of one-person decision problems. As natural as this approach may seem, it is hard to find game theory books that really implement this view. This book is a wonderful exception, in which the transition between decision theory and game theory is both smooth and natural. It shows that decision theory and game theory can go—and, in fact, must go—hand in hand. The careful exposition, the many illustrative examples, the critical assessment of traditional game theory concepts, and the enlightening comparison with the subjectivistic approach advocated in this book, make it a pleasure to read and a must have for anyone interested in the foundations of decision theory and game theory." Andrés Perea (Maastricht University) "Gabriel Frahm's relatively nontechnical book is a bold synthesis of decision theory and game theory from a Bayesian or subjectivist perspective. It distinguishes between decisions, or one-person games, and games with two or more players, but Frahm argues that this distinction is not always necessary—the two kinds of games can be analyzed within a common theoretical framework. He models the dynamics of choice in several different settings (e.g., information may be complete or incomplete as well as perfect or imperfect), including one in which players look ahead and make farsighted calculations on which they base their choices. His book contains many provocative examples that illustrate the advantages of a unified theory of rational decision-making." Steven J. Brams (New York University)

This volume contains sixteen original articles documenting recent progress in understanding strategic behaviour. In their variety they reflect an entire spectrum of coexisting approaches: from orthodox game theory via behavioural game theory, bounded rationality and economic psychology to experimental economics. There are plenty of new models and insights but the book also illustrates the boundaries of what we know today and explains the frontiers of tomorrow. The articles were written in honour of Werner Güth.