The problems of how self-interested players can cooperate despite incentives to defect, and how players can coordinate despite the presence of multiple equilibria, are among the oldest and most fundamental in game theory. In this report, we demonstrate that a plausible and even natural...

The Regret theory of Loomes and Sugden (1982) predicts choice anomalies implied by other alternatives to expected utility (e.g., violations of the independence axiom). It also makes unique and controversial predictions regarding the rational violation of stochastic dominance and invariance. All...

We present a model of boundedly rational play in single-shot 2 × 2 games. Players choose strategies based on the perceived salience of their own payoffs and, if own-payoff salience is uninformative, on the perceived salience of their opponent's payoffs. When own payoffs are salient, the model's...

This article demonstrates that choices based on similarity judgments will exhibit not only common ratio and reflection effects under uncertainty but also common difference and reflection effects in intertemporal contexts. Copyright 2002, Oxford University Press.

Rubinstein (1988, 2003) and Leland (1994, 1998, 2001, 2002) have shown that choices based on similarity judgments will account for the vast majority of observed violations of expected and discounted utility. In this paper, I show that such judgments also explain which equilibria will be selected...