In randomized control laboratory experiments, we find that those primed to think about markets exhibit more trusting behavior. We randomly and unconsciously prime experimental participants to think about markets and trade. We then ask them to play a trust game involving an anonymous stranger. We...

We show how to bound the effect of belief-dependent preferences on choices in sequential two-player games without information about the (higher-order) beliefs of players. The approach can be applied to a class of belief-dependent preferences which includes reciprocity (Dufwenberg and...

Inspired by the social psychology literature, we study the implications of categorical thinking on decision making in the context of a large normal form game. Every agent has a categorization (partition) of her opponents and can only observe the average behavior in each category. A strategy...

While (managerial) beliefs are central to many aspects of strategic organization, interactive beliefs have been rather neglected. In an increasingly connected and networked economy, firms confront coordination problems that arise because of network effects. The capability to manage beliefs will...

In their recent work Thomas S. Schelling, reiterating original arguments about game theory and its applications to social sciences. In particular, game theory helps to explore situations in which agents make decisions interdependent (strategic communication). Schelling's originality is to extend...

In a model that encompasses a general equilibrium framework, we consider a monopolist (a producer) with subjective beliefs that endogenously hedges against fluctuations in input prices in a complete market. We allow for entries and Cournot competition in this economy, and we study the...

The effectiveness of pre-play communication in achieving efficient outcomes has long been a subject of controversy. In some environments, cheap talk may help to achieve coordination. However, Aumann conjectures that, in a variant of the Stag Hunt game, a signal for efficient play is not...

Suppose that in aggregative games, in which a player's payoff depends only on this player's strategy and on an aggregate of all players' strategies, the players are endowed with constant conjectures about the reaction of the aggregate to marginal changes in the player's strategy. The players...

We conduct an experiment in which we elicit subjects’ beliefs over opponents’ behavior multiple times for a given game without feedback. We find that the large majority of individual subjects have stochastic belief reports, which we argue cannot be explained by learning or measurement error....