We propose and experimentally test a theory of strategic behavior in which players are cognitively imprecise and perceive a fundamental parameter with noise. We focus on 2 x 2 coordination games, which generate multiple equilibria when perception is precise. When adding a small amount of...

We propose and experimentally test a theory of strategic behavior in which players are cognitively imprecise and perceive a fundamental parameter with noise. We focus on 2 x 2 coordination games, which generate multiple equilibria when perception is precise. When adding a small amount of...

A critical component of both economic and perceptual decision-making under uncertainty is the belief formation process. However, most research has studied belief formation in economic and perceptual decision-making in isolation. One reason for this separate treatment may be the assumption that...

I use neural data from an experimental asset market to investigate the mechanism by which peer effects are generated in portfolio choice. In a sample of randomly assigned subjects, a peer's portfolio allocation has a causal effect on a subject's portfolio choice. The neural data provide novel...

The standard assumption in social learning environments is that agents learn from others through choice outcomes. We argue that in many settings, agents can also infer information from others' response times (RT), which can increase efficiency. To investigate this, we conduct a standard...

We conduct a study in which subjects trade stocks in an experimental market while we measure their brain activity using functional magnetic resonance imaging. All of the subjects trade in a suboptimal way. We use the neural data to test a “realization utility” explanation for their behavior....