Book Reviews

Sanjit Dhami of Department of Economics, Accounting, and Finance, University of Leicester reviews “Handbook of Experimental Game Theory” edited by C. M. Capra, Rachel T. A. Croson, Mary L. Rigdon, and Tanya S. Rosenblat. The Econlit abstract of this book begins: “Sixteen papers explore the study of game-theoretic propositions from a scientific approach, covering methodological innovations in the measurement of strategic behavior and static and dynamic games of both complete and incomplete information.”

Punishment and disagreement in the state of nature

Hobbes believed that the state of nature would be a war of all against all. Locke denied this, but acknowledged that in the absence of government, peace is insecure. In this paper, I analyse both accounts of the state of nature through the lens of classical and experimental game theory, drawing especially on evidence concerning the effects of punishment in public goods games. My analysis suggests that we need government not to keep wicked or relentlessly self-interested individuals in line, but rather to maintain peace among those who disagree about morality.

Experiments on Cognition, Communication, Coordination, and Cooperation in Relationships

This review discusses selected work in experimental game theory. My goals are to further the dialogue between theorists and empiricists that has driven progress in economics and game theory and to guide future experimental work. I focus on experiments whose lessons are relevant to establishing and maintaining coordination and cooperation in human relationships, the role of communication in doing so, and the underlying cognition. These are questions of central importance, where both the gap between theory and experience and the role of experiments in closing it seem large. Humans appear to be unique in their ability to use language to manipulate and communicate mental models of the world and of other people, vital skills in relationships. Continuing the dialogue between theorists and empiricists should help to explain why it matters for cooperation that we can communicate, and why and how it matters whether we communicate via natural language or abstract signals.

A domain-specific language for experimental game theory

Experimental game theory is increasingly important for research in many fields. Unfortunately, it is poorly supported by computer tools. We have created Hagl, a domain-specific language embedded in Haskell, to reduce the development time of game-theoretic experiments and make the definition and exploration of games and strategies simple and fun.

Perfect or Bounded Rationality?

Simple game experiments of the reward allocation, dictator and ultimatum type are used to demonstrate that true explanations of social phenomena cannot conceivably be derived in terms of the perfect rationality concept underlying neo-classical economics. We explore in some depth, if speculatively, how experimental game theory might bring us closer to a new synthesis or at least the nucleus of a general theory of ‘games and boundedly rational economic behavior’ with enhanced explanatory power.