This paper studies categorizations that are optimal for the purpose of making predictions. A subject encounters an object (x,y). She observes the first component, x, and has to predict the second component, y. The space of objects is partitioned into categories. The subject determines what...

This paper studies the evolution of peoplesʼ models of how other people think – their theories of mind. This is formalized within the level-k model, which postulates a hierarchy of types, such that type k plays a k times iterated best response to the uniform distribution. It is found that,...

We investigate the effect of anonymous communication on generosity in a dictator game. One-way written communication from the recipient is compared with no communication. Communication increases donations by more than 70 percent (p  0.05). To separate the effect of the content of the...