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Behavioral & Experimental Game Theory

I offer the class of Behavioral & Experimental Game Theory. The title is quite distinct. It looks like the mixture of  Behavioral and Experimental economics focusing on game theory if you know the fields. Basically it is right.

However, since SILS does not offer so many subjects of economics and game theory and it is the intermediate level, I have a consciousness of being intermediate game theory, which means that students can learn the standard game theory through class experiments with some behavioral models explained below.

Game theory is now the absolutely imperative theory to analyze economic phenomena. This is because economics and game theory have the common assumption that decision makers maximize their payoffs/utilities. In this sense, game theory can analyze economic phenomena from the same viewpoint as economics. In addition, game theory is applicable to the situations without markets that economics of a decade ago focused on. By applying game theory, economics expands the scope of the analysis.

Experimental economics is a new field. One of the pioneer of this field is Prof. V. Smith who is a winner of (so-called) Novel prize in economics in 2002. This field succeeded in introducing experimental methods to social sciences like natural sciences. Then, we can examine theory by experiments.

It is important because economics was often criticized due to the strong assumption that decision makers are rational in several senses. Experiments enables us to examine the assumption, and to seek for new models (called behavioral models) to explain experimental data which show the deviation from the rationality.

Behavioral economics is the field to seek for such behavioral models (though some economists may raise an objection). So behavioral economics proposes several new behavioral models such as prospect theory and quantal response equilibrium. In particular, one of the pioneer of prospect theory, Prof. D. Kahneman is also another Novel laureate in economics in 2002. His book, Fast and Slow (ファスト&スロー) clearly explains many of his findings about decision making.

When we focus on game theory in behavioral and experimental economics, they are called behavioral and experimental game theory. So far, there is no textbook of intermediate level of these fields. However, once you study standard game theory, you can read the following reference:
You may feel the above are a little bit difficult. And, once we obtain experimental data, we need to analyze them by statistics. So, when you read the above without knowledge of statistics, you can skip such statistical analyses. Even when you skip them, you still face mathematical difficulties, for instance in quantal response equilibrium models. So, at the first step, it is better to read only the experimental results.

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