2003
DOI: 10.2139/ssrn.348500
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What To Maximize If You Must

Abstract: The assumption that decision makers choose actions to maximize their preferences is a central tenet in economics. This assumption is often justified either formally or informally by appealing to evolutionary arguments. In contrast, we show that in almost every game and for almost every family of distortions of a player's actual payoffs, some degree of this distortion is beneficial to the player because of the resulting effect on opponents' play. Consequently, such distortions will not be driven out by any evol… Show more

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Cited by 37 publications
(17 citation statements)
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References 40 publications
(16 reference statements)
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“…If individuals are strategic agents, then their actions depend on the type of this partner, so information about the partner's type becomes important for determining actions. Accordingly, results from the indirect-evolution literature show that for nonindividualistic preferences to be stable, sufficiently reliable information about the preferences of interacting individuals must be available (29,32) because it is individually advantageous to increase one's partner's payoff only when one is sufficiently certain that the partner will also do the same. In contrast, we assume that in a social interaction individuals act and react to each other in close physical proximity rather than make independent decisions by individual reasoning.…”
Section: Discussionmentioning
confidence: 99%
“…If individuals are strategic agents, then their actions depend on the type of this partner, so information about the partner's type becomes important for determining actions. Accordingly, results from the indirect-evolution literature show that for nonindividualistic preferences to be stable, sufficiently reliable information about the preferences of interacting individuals must be available (29,32) because it is individually advantageous to increase one's partner's payoff only when one is sufficiently certain that the partner will also do the same. In contrast, we assume that in a social interaction individuals act and react to each other in close physical proximity rather than make independent decisions by individual reasoning.…”
Section: Discussionmentioning
confidence: 99%
“…One bothering restriction of our evolutionary analysis is the symmetry of the true probabilities of the twelve possible cost constellations, 17 resembling the usual a priori-symmetry in evolutionary 16 Recently, Heifetz, Shannon, and Spiegel (2004) have shown that the evolutionary emergence of dispositions is generic and that dispositions may remain evolutionarily viable even when the players' preferences are only imperfectly observed. Together with Theorem 11 in Güth and Peleg (2001), this illustrates that the rational expectation hypothesis denies any possibility to signal own or detect others' beliefs.…”
Section: Discussionmentioning
confidence: 99%
“…Relations with the existing literature Several papers have studied the evolution of preferences using the so-called "indirect evolutionary approach" (see, e.g., Güth & Yaari 1992;Ok & Vega-Redondo 2001;Sethi & Somanathan 2001;Dekel et al 2007;Heifetz et al 2007;Herold & Kuzmics 2009). These papers consider agents that are endowed with subjective preferences that may differ from the material payoffs.…”
Section: Definition 14mentioning
confidence: 99%