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Cooperation between individuals requires the ability to infer each other's mental states to form shared expectations over mutual gains and make cooperative choices that realize these gains. From evidence that the ability for mental state attribution involves the use of prefrontal cortex, we hypothesize that this area is involved in integrating(More)
Reinforcement learning models now provide principled guides for a wide range of reward learning experiments in animals and humans. One key learning (error) signal in these models is experiential and reports ongoing temporal differences between expected and experienced reward. However, these same abstract learning models also accommodate the existence of(More)
Trust is a critical social process that helps us to cooperate with others and is present to some degree in all human interaction. However, the underlying brain mechanisms of conditional and unconditional trust in social reciprocal exchange are still obscure. Here, we used hyperfunctional magnetic resonance imaging, in which two strangers interacted online(More)
In this article we use laboratory experiments to ask a fundamental question: Do individuals behave as if their risk preferences are stable across institutions? In particular, we study the decisions of cash-motivated subjects in the repeated play of three different institutions: a value elicitation procedure for the sale of a risky asset, an English clock(More)
Given that human trust behavior is heritable and intranasal administration of oxytocin enhances trust, the oxytocin receptor (OXTR) gene is an excellent candidate to investigate genetic contributions to individual variations in trust behavior. Although a single-nucleotide polymorphism involving an adenine (A)/guanine (G) transition (rs53576) has been(More)
E conomic forces shape the behavior of individuals and institutions. Forces affecting individual behavior are attitudes about payoffs (gains and losses) and beliefs about outcomes (risk and ambiguity). Under risk, the likelihoods of alternative outcomes are fully known. Under ambiguity, these likelihoods are unknown. In our experiment, payoffs and outcomes(More)
We examine decision making in two-person extensive form game trees using nine treatments that vary matching protocol, payoffs, and payoff information. Our objective is to establish replicable principles of cooperative versus noncooperative behavior that involve the use of signaling, reciprocity, and backward induction strategies, depending on the(More)
The deregulation movement has motivated the experimental study of auction markets designed for interdependent network industries such as natural gas pipelines or electric power systems. Decentralized agents submit bids to buy commodity and offers to sell transportation and commodity to a computerized dispatch center. Computer algorithms determine prices and(More)
The concept of mixed strategy is a fundamental component of game theory, and its norma-tive importance is undisputed. However, its empirical relevance has sometimes been viewed with skepticism. The main concern over the practical usefulness of mixed strategies relates to the " indifference " property of a mixed-strategy equilibrium. In order to be willing(More)
By around the age of 4 years, children "can work out what people might know, think or believe" based on what they say or do. This is called "mindreading," which builds upon the human ability to infer the intentions of others. Game theory makes a strong assumption about what individual A can expect about B's intentions and vice versa, viz. that each is a(More)