646. Psychological Game Theory 

by Pierpaolo Battigalli & Martin Dufwenberg 

The mathematical framework of psychological game theory is useful for describing many forms of motivation where preferences depend directly on own or others' beliefs. It allows for incorporation of emotions, reciprocity, image concerns, and self-esteem in economic analysis. We explain how and why, discussing basic theory, a variety of sentiments, experiments, and applied work.

Keywords: psychological game theory; belief-dependent motivation; reciprocity; emotions; image concerns; self-esteem

JEL codes: C72; D91

Last updated August 21, 2019