American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
A Theory of Deception
American Economic Journal: Microeconomics
vol. 2,
no. 1, February 2010
(pp. 1–20)
Abstract
This paper proposes an equilibrium approach to belief manipulation and deception in which agents only have coarse knowledge of their opponent's strategy. Equilibrium requires the coarse knowledge available to agents to be correct, and the inferences and optimizations to be made on the basis of the simplest theories compatible with the available knowledge. The approach can be viewed as formalizing into a game theoretic setting a well documented bias in social psychology, the fundamental attribution error. It is applied to a bargaining problem, thereby revealing a deceptive tactic that is hard to explain in the full rationality paradigm. (JEL C78, D83, D84)Citation
Ettinger, David, and Philippe Jehiel. 2010. "A Theory of Deception." American Economic Journal: Microeconomics, 2 (1): 1–20. DOI: 10.1257/mic.2.1.1JEL Classification
- C78 Bargaining Theory; Matching Theory
- D83 Search; Learning; Information and Knowledge; Communication; Belief
- D84 Expectations; Speculations
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