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Publication Date:
August 2011
ISSN:
1935-1704
DOI:
10.2202/1935-1704.1593

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Ed. by Cervellati, Matteo / Fong, Yuk-fai / Peeters, Ronald / Puzzello , Daniela / Rivas, Javier / Schipper, Burkhard

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Strategic Choice of Preferences: the Persona Model

David Wolpert1 / Julian Jamison2 / David Newth3 / Michael Harre4

1Santa Fe Institute, Los Alamos National Laboratory, and NASA Ames Research Center, dhw@santafe.edu

2Yale University, julison@gmail.com

3The Commonwealth Scientific and Industrial Research Organisation (CSIRO), david.newth@csiro.au

4University of Sydney, mike.harre@gmail.com

Citation Information: The B.E. Journal of Theoretical Economics. Volume 11, Issue 1, Pages –, ISSN (Online) 1935-1704, DOI: 10.2202/1935-1704.1593, August 2011

Publication History:
Published Online:
2011-08-27

Recent work in several fields has established that humans can adopt binding “behavioral” preferences and convincingly signal those preferences to other humans, either via their behavior or via their body language / tone of voice. In this paper, we model the strategic implications of this ability. Our thesis is that through a person's lifetime they (perhaps subconsciously) learn what such signaled, binding behavioral preferences result in the highest value of their actual preferences, given the resultant behavior of other players. We argue that this “persona” model may explain why many interpersonal preferences have the particular form they do. As an illustration, we use the persona model to explain cooperation in non-repeated versions of the Prisoner's Dilemma (PD). We also provide quantitative predictions to distinguish this explanation of cooperation from simply assuming people have actual preferences biased towards cooperation. In particular, we show that the persona model predicts a “crowding out” phenomenon in the PD, in which introducing incentives to cooperate causes players to stop cooperating instead. We also use the persona model to predict a tradeoff between the robustness of cooperation in the PD and the benefit of that cooperation.

Keywords: non-rationality; single shot games; Prisoner’s Dilemma; Traveler’s Dilemma; schelling; emotions; evolution of preferences

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