In this paper, we claim that agents confronting with new interactive situations apply behavioral heuristics that drastically reduce the problem complexity either by neglecting the other players’ incentives, or by restricting attention to subsets of “salient” outcomes. We postulate that...

We analyze subjects' eye movements while they make decisions in a series of one-shot games. The majority of them perform a partial and selective analysis of the payoff matrix, often ignoring the payoffs of the opponent and/or paying attention only to specific cells. Our results suggest that...

Health economists typically use agency theory to predict how physicians respond to various policy schemes. Empirical studies show that many schemes lead to unintended responses, indicating that current theoretical models fail to fully explain physicians’ behaviour. Drawing on key lessons from...