This paper briefly reviews the current literature on learning in economics from a behavioral point of view. It critically compares theory with aspects of learning in real-life and with evidence from laboratory experiments, and argues that most customary approaches lack criteria for their...

Can people be relied upon to be nice to each other? Thomas Hobbes famously did not think so, but his view that rational cooperation does not require that people be nice has never been popular. The debate has continued to simmer since Joseph Butler took up the Hobbist gauntlet in 1725. This...

It is well known that individuals often fail to exert proper self-control. In organizational settings, this can lead to reduced productivity and profits. We use the literature on present-biased preferences to model employees' self-control problems and examine how firms can design compensation...

In cognitive psychology, some experiments for games were reported, and they demonstrated that real players did not use the “rational strategy” provided by classical game theory and based on the notion of the Nasch equilibrium. This psychological phenomenon was called the disjunction effect....

We describe non-cooperative game models and discuss game theoretic solution<br/>concepts. Some applications are also noted. Conventional theory focuses on the<br/>question ‘how will rational players play?’, and has the Nash equilibrium at its core.<br/>We discuss this concept and its interpretations, as...

In this paper, we re-examine various previous experimental studies of the Centipede Game in the literature. These experiments found that players rarely follow the subgame-perfect equilibrium strategies of the game, and various modifications to the game were proposed to explain the outcomes of...

Analysts make competing claims about when and how politicians can use fear to gain support for suboptimal policies. Using a model, we clarify how common attributes of fear affect politicians’ abilities to achieve self-serving outcomes that are bad for voters. In it, a politician provides...

Consumers are often unable to resist the temptation of overconsuming certain products such as cookies, crackers, soft drinks, alcohol, etc. To control their consumption, some consumers buy small packages or abstain from purchasing the product altogether. Other consumers, however, still purchase...