Intentionality detection and "mindreading": why does game form matter?

By around the age of 4 years, children "can work out what people might know, think or believe" based on what they say or do. This is called "mindreading," which builds upon the human ability to infer the intentions of others. Game theory makes a strong assumption about what individual A can expect about B's intentions and vice versa, viz. that each is a self-interested opponent of the other and will reliably analyze games by using such basic principles as dominance and backward induction, and behave as if the normal form of an extensive form game is equivalent to the latter. But the extensive form allows intentions to be detected from actual sequential play and is therefore not necessarily equivalent psychologically to the normal form. We discuss Baron-Cohen's theory of the mindreading system [Baron-Cohen, S. (1995) Mindblindness: An Essay on Autism and Theory of Mind (MIT Press, Cambridge, MA)] to motivate the comparison of behavior in an extensive form game with its corresponding normal form. As in the work of Rapoport [Rapoport, A. (1997) Int. J. Game Theory 26, 113-136] and Schotter et al. [Schotter, A., Wiegelt, K. & Wilson, C. (1994) Games Econ. Behav. 6, 445-468], we find consistent differences in behavior between the normal and extensive forms. In particular, we observe attempts to cooperate, and in some treatments we observe the achievement of cooperation, occurring more frequently in the extensive form. Cooperation in this context requires reciprocity, which is more difficult to achieve by means of intentionality detection in the normal as opposed to the extensive form games we study.

A comparison of naive and sophisticated subject behavior with game theoretic predictions

We use an extensive form two-person game as the basis for two experiments designed to compare the behavior of two groups of subjects with each other and with the subgame perfect theoretical prediction in an anonymous interaction protocol. The two subject groups are undergraduates and advanced graduate students, the latter having studied economics and game theory. There is no difference in their choice behavior, and both groups depart substantially from game theoretic predictions. We also compare a subsample of the same graduate students with a typical undergraduate sample in an asset trading environment in which inexperienced undergraduates invariably produce substantial departures from the rational expectations prediction. In this way, we examine how robust are the results across two distinct anonymous interactive environments. In the constant sum trading game, the graduate students closely track the predictions of rational theory. Our interpretation is that the graduate student subjects' departure from subgame perfection to achieve cooperative outcomes in the two-person bargaining game is a consequence of a deliberate strategy and is not the result of error or inadequate learning.

Game theory and reciprocity in some extensive form experimental games

We examine decision making in two-person extensive form game trees using nine treatments that vary matching protocol, payoffs, and payoff information. Our objective is to establish replicable principles of cooperative versus noncooperative behavior that involve the use of signaling, reciprocity, and backward induction strategies, depending on the availability of dominated direct punishing strategies and the probability of repeated interaction with the same partner. Contrary to the predictions of game theory, we find substantial support for cooperation under complete information even in various single-play treatments.

Smart Computer-Assisted Markets

The deregulation movement has motivated the experimental study of auction markets designed for interdependent network industries such as natural gas pipelines or electric power systems. Decentralized agents submit bids to buy commodity and offers to sell transportation and commodity to a computerized dispatch center. Computer algorithms determine prices and allocations that maximize the gains from exchange in the system relative to the submitted bids and offers. The problem is important, because traditionally the scale and coordination economies in such industries were thought to require regulation. Laboratory experiments are used to study feasibility, limitations, incentives, and performance of proposed market designs for deregulation, providing motivation for new theory.

Evaluation of anaerobic culture and effect of culture medium supplementation with factor V on colonial morphology and efficacy of isolation of Streptococcus pneumoniae from sputum

The use of anaerobic incubation for the culture of Streptococcus pneumoniae from sputum was compared with incubation in carbon dioxide in air. A coagglutination test for pneumococcal antigen was used as an index of the number of specimens containing pneumococci. A total of 334 specimens were examined. There was evidence of pneumococcal colonisation by culture or coagglutination, or both, in 48 (14.37%), of which 41 (12.27%) yielded S pneumoniae on culture. Anaerobic incubation was better than incubation in carbon dioxide in air for the primary culture of S pneumoniae from sputum. Primary isolation of S pneumoniae was achieved in 11 of the 41 strains (26.82%) by anaerobic incubation alone, by incubation only in carbon dioxide in air in one strain (2.43%), and by both anaerobic incubation and incubation in carbon dioxide in air in 29 strains (70.73%). Anaerobic incubation gave large moist or mucoid colonies that were easy to recognise, but it suppressed the typical draughtsman colony of S pneumoniae. The factor V supplement routinely used in our medium also inhibited the formation of draughtsman colonies. It is suggested that draughtsman colonies occur because of a relative lack of the coenzyme nicotinamide adenine dinucleotide (factor V), which is required as a reducing agent in aspartate and glutamate metabolism. This nutritional deficiency may lead to bacterial cell wall defect and hence to the autolysis which gives the typical draughtsman colony.