identifying higher order rationality strategic choice data from a carefully chosen set of ring network games are used to obtain individual level estimates of higher order rationality the experimental design exploits a natural exclusion restriction that is considerably weaker than the assumptions underlying alternative designs in the literature in our data set 93 percent of subjects are rational 71 percent are rational and believe others are rational 44 percent are rational and hold second order beliefs that others are rational and 22 percent are rational and hold at least third order beliefs that others are rational

rational choice a survey of contributions from economics and philosophy this paper looks at the philosophical foundations of rational choice theory it is argued that l savage s expected utility axioms cannot be defended as requirements of instrumental rationality in part because of their implications for the description of consequences then it is argued that common knowledge of rationality does not imply that rational game players must be in nash equilibrium and for some games is an incoherent concept finally the suggestion that rational choice theory is self defeating is examined in relation to coordination games where the theory cannot explain the role of salience and the concept of resolute choice copyright 1991 by royal economic society

rationally justifiable play and the theory of non cooperative games noncooperative game theory is often interpreted as a theory of how games would be played if players were rational on this view its central project is to discover which strategies are rationally justifiable and which are not in any game in this paper we consider whether the conventional assumptions of modern game theory equip it to fulfil this project we present an impossibility result which concerns the extent to which they can do so the result can be seen as strengthening a claim established by borgers and samuelson 1992 and samuelson 1992

party competition and european integration in the east and west different structure same causality how does the ideological profile of a political party affect its support or opposition to european integration the authors investigate this question with a new expert data set on party positioning on european integration covering 171 political parties in 23 countries the authors findings are a that basic structures of party competition in the east and west are fundamentally and explicably different and b that although the positions that parties in the east and west take on european integration are substantively different they share a single underlying causality

swallowing the bitter pill sources of popular support for neoliberal reform in latin america what accounts for the surprisingly widespread popular approval that painful neoliberal reforms elicited in several latin american countries this article compares the explanatory power of two rival hypotheses which draw on conventional rational choice and psychological decision theory the compensation hypothesis claims that governments can engineer support for costly reforms by compensating the losers through targeted social benefits the rescue hypothesis questions this claim and maintains that draconian adjustment only finds support if it promises to revert a deep crisis and avert further losses data from argentina bolivia brazil mexico peru and venezuela suggest that the rescue hypothesis accounts much better for the initial endorsement of neoliberal shock programs immediately after their enactment when these shock programs bring about economic stabilization and recovery targeted social benefits help consolidate support for neoliberalism which a statistical analysis of the impact of social s

the digital provide information technology market performance and welfare in the south indian fisheries sector when information is limited or costly agents are unable to engage in optimal arbitrage excess price dispersion across markets can arise and goods may not be allocated efficiently in this setting information technologies may improve market performance and increase welfare between 1997 and 2001 mobile phone service was introduced throughout kerala a state in india with a large fishing industry using microlevel survey data we show that the adoption of mobile phones by fishermen and wholesalers was associated with a dramatic reduction in price dispersion the complete elimination of waste and near perfect adherence to the law of one price both consumer and producer welfare increased

rational citizens against reform poverty and economic reform in transition economies the debate on the political obstacles to economic reform in postcommunist countries has centered around two interrelated theories adam przeworski argues that short term negative distributional consequences can stall economic reform joel hellman contends that industry insiders and political elites have incentives to stall economic reform although both sets of theories contend that the distributional aspects of economic transition affect reform important differences remain in their interpretation of the relationship between the rising levels of poverty and income inequality in transition economies this article empirically examines the relationship between the pretransition levels of poverty and income inequality in 17 postcommunist transition economies using cross sectional regressions the central finding in this article is that countries with large spans of the population hovering above poverty are less likely to achieve high levels of economic reform lending support to theory that adverse socioecon

economic integration and mass politics market liberalization and public attitudes in the european union theory theories of how domestic politics influence international economic policy differ fundamentally in their treatment of the mass public a central issue in this controversy is whether members of the mass public form attitudes about international economics that reflect their economic interests this article examines this assumption using international economic theory to identify variation in economic interests regarding international economic policy hypotheses citizens of the european union eu form attitudes toward eu membership an international economic policy that are consistent with their occupation based economic interests methods individual level heteroskedastic ordered probit analysis of eurobarometer survey data and oecd economic statistics from 1975 to 1992 results while controlling for a variety of potentially confounding factors the likelihood of positive evaluations of eu membership is positively related to intraoccupational differences in economic benefits from eu membership

the bayesian foundations of solution concepts of games abstract we transform a noncooperative game into a bayesian decision problem for each player where the uncertainty faced by a player is the strategy choices of the other players the priors of other players on the choice of other players the priors over priors and so on we provide a complete characterization between the extent of knowledge about the rationality of players and their ability to successively eliminate strategies which are not best responses this paper therefore provides the informational foundations of iteratively undominated strategies and rationalizable strategic behavior b d bernheim econometrica 52 1984 1007 1028 d pearce econometrica 52 1984 1029 1050 sufficient conditions are also found for nash equilibrium behavior and a result akin to r j aumann econometrica 55 1987 1 18 on correlated equilibria is derived with different hypotheses

correlated equilibrium as an expression of bayesian rationality if it is common knowledge that the players in a game are bayesian utility maximizers who treat uncertainty about other players actions like any other uncertainty then the outcome is necessarily a correlated equilibrium random strategies appear as an expression of each player s uncertainty about what the others will do not as the result of willful randomization use is made of the common prior assumption according to which differences in probability assessments by different individuals are due to the different information that they have where information may be interpreted broadly to include experience upbringing and genetic makeup copyright 1987 by the econometric society

rationalizable strategic behavior the notion of equilibrium proposed by nash 19 has come to play a dominant role in economic applications of noncooperative games while analyses of nash equilibria have unquestionably contributed to our understanding of economic behavior it would be unreasonably optimistic to maintain that nash solved the problem of noncooperative strategic choice there is a small literature beginning with ellsberg 6 and a much larger oral tradition which argues that nash behavior is neither a necessary consequence of rationality nor a reasonable empirical proposition in this paper i take the view that although there may be various reasons why an agent might select a nash strategy the notion of an equilibrium has little intrinsic appeal within a strategic context when an agent reaches a decision in ignorance of the strategies adopted by other players rationality consists of making a choice which is justifiable by an internally consistent system of beliefs rather than one which is optimal post hoc this point of view is not original indeed most serious justifications of the nash hypothesis embrace such an approach arguing that agents will expect the game to yield a nash outcome and consequently will choose their equilibrium strategies nevertheless when we think in terms of maximizing utility subject to expectations rather than realizations it becomes clear that the nash hypothesis far from being a consequence of rationality arises from certain restrictions on agents expectations which may or may not be plausible depending upon the game being played we are then quite naturally led to ask are there any restrictions of individuals expectations and hence choices which are required by rationality alone rather than by subjective plausibility this paper is concerned with defining justifying characterizing and refining a criterion for rational strategic choice which i label rationalizability

mobile money agricultural marketing and off farm income in uganda mobile money mm services can contribute to welfare gains in smallholder farm households previous research showed that one important pathway for these mm related welfare gains is through higher remittances received from relatives and friends here the role of other impact pathways is examined especially focusing on agricultural marketing and off farm economic activities the analysis builds on panel data from smallholder coffee farmers in uganda regression models show that the adoption of mm technology has contributed to higher household incomes and consumption levels off farm income gains are identified to be an important pathway also beyond remittances typical off farm income sources are small businesses in trade transport and handicrafts which benefit from novel savings and money transfer opportunities through mm in terms of agricultural marketing mm users sell a larger proportion of their coffee as shelled beans to buyers in high value markets instead of selling to local traders immediately after harvest mm services help to reduce cash constraints and facilitate transactions with buyers from outside local regions in conclusion mm can contribute to rural development through various important pathways analysis of adoption patterns suggests that mm services are socially inclusive

rationalizable strategic behavior and the problem of perfection this paper explores the fundamental problem of what can be inferred about the outcome of a noncooperative game from the rationality of the players and from the information they possess the answer is summarized in a solution concept called rationalizability strategy profiles that are rationalizable are not always nash equilibria conversely the information in an extensive form game often allows certain unreasonable nash equilibria to be excluded from the set of rationalizable profiles a stronger form of rationalizability is appropriate if players are known to be not merely rational but also cautious what constitutes rational behavior in a noncooperative strategic situation this paper explores the issue in the context of a wide class of finite noncooperative games in extensive form the traditional answer relies heavily upon the idea of nash equilibrium nash 17 the position developed here however is that as a criterion for judging a profile of strategies to be reasonable choices for players in a game the nash equilibrium property is neither necessary nor sufficient some nash equilibria are intuitively unreasonable and not all reasonable strategy profiles are nash equilibria the fact that a nash equilibrium can be intuitively unattractive is well known the equilibrium may be imperfect introduced into the literature by selten 20 the idea of imperfect equilibria has prompted game theorists to search for a narrower definition of equilibrium while this research some of which will be discussed here has been extremely instructive it remains inconclusive theorists often agree about what should happen in particular games but to capture this intuition in a general solution concept has proved to be very difficult if this paper is successful it should make some progress in that direction the other side of the coin has received less scrutiny can all non nash profiles really be excluded on logical grounds i believe not the standard justifications for considering only nash profiles are circular in nature or make gratuitous assumptions about players decision criteria or beliefs the following discussion of these points is extremely brief due to space constraints more detailed arguments may be found in pearce 18

can mobile phones improve gender equality and nutrition panel data evidence from farm households in uganda abstract since 2000 mobile phone technologies have been widely adopted in many developing countries existing research shows that use of mobile phones has improved smallholder farmers market access and income beyond income mobile phones can possibly affect other dimensions of social welfare such as gender equality and nutrition such broader social welfare effects have hardly been analyzed up till now here we address this research gap using panel data from smallholder farm households in uganda regression results show that mobile phone use is positively associated with household income women empowerment food security and dietary quality these results also hold after controlling for possible confounding factors in addition to the household level analysis we also look at who within the household actually uses mobile phones gender disaggregation suggests that female mobile phone use has stronger positive associations with social welfare than if males alone use mobile phones we cautiously conclude that equal access to mobile phones cannot only foster economic development but can also contribute to gender equality food security and broader social development further research is required to corroborate the findings and analyze the underlying causal mechanisms

on the status of the nash type of noncooperative equilibrium in economic theory in economic theory the nash type of noncooperative equilibrium is a widely used equilibrium concept nevertheless the concept is frequently misunderstood and misleading explanations and interpretations are often given this paper presents a sample of such frequently appearing misleading explanations and goes on to explain why they are misleading the case for using the nash noncooperative equilibrium concept is stronger than what is implied by the many misleading statements found in the literature a basic issue is whether it can be argued that decisions in accordance with the noncooperative equilibrium theory are individually rational decisions this issue is not covered by the classical rationality postulate in economic theory this problem is tackled by stating certain postulates which may be taken as defining individual rationality in situations of noncooperative interaction it is shown that nash behavior satisfies these postulates

axiomatic characterizations of rational choice in strategic environments for more than forty years economists have wrestled with the elusive notion of rational behavior in strategic environments generating a variety of competing approaches even for simple simultaneous move games four distinct solution concepts including the notions of nash equilibria correlated equilibria rationalizability and iterated dominance currently have some standing as theories of strategic rationality here i propose four axioms for rational choice in strategic environments and use these to characterize the sets of pure strategies that players may select under each of the solution concepts mentioned above my results underscore both the similarities and differences between the four concepts

look who s talking the impacts of the intrahousehold allocation of mobile phones on agricultural prices abstract using data from the philippines we study the impact of mobile phones on the prices agricultural producers receive for their cash crop we first look at the impact on price of mobile phone ownership at the household level because this masks a considerable amount of heterogeneity we then look at the impact on price of the intrahousehold allocation of mobile phones we find that whether the household owns a mobile phone has no impact on price but whether a farmer or spouse owns a mobile phone is associated with a 5 to 8 per cent increase in price

off the hook measuring the impact of mobile telephone use on economic development of households in uganda using copulas it is now widely understood that mobile phone use has beneficial effects on development in developing countries but little is known about the effects at the household level we examine the impact of mobile telephone use on household income using a unique cross sectional data set from uganda we use a novel econometric technique to handle endogeneity which models the correlation between the endogenous regressor and the error term with copulas to the best of our knowledge this is the first time that the copula method has been applied in the economic development literature we find a positive impact of mobile phone use on income

subjective games and equilibria applying the concepts of nash bayesian and correlated equilibria to the analysis of strategic interaction requires that players possess objective knowledge of the game and opponents strategies such knowledge is often not available the proposed notions of subjective games and of subjective nash and correlated equilibria replace essential but unavailable objective knowledge by subjective assessments when playing a subjective game repeatedly subjective optimizers converge to a subjective equilibrium we apply this approach to some well known examples including single and multi person multi arm bandit games and repeated cournot oligopoly games journal of economic literature classification numbers c73 and c83

europeans and the european community the dynamics of public support for european integration europeans evaluate the european community ec according to its economic performance political salience and role in international relations during the last two decades their measured attitudes toward european integration warmed especially when inflation rates fell as the ec share of the country s trade expanded when ec elections and referenda increased attention to the community and to some extend during periods when east west relations were relaxed europeans did not vary their support according to their countries shares of the brussels budget thus notwithstanding denmark s 1992 rejection of the maastricht treaty and the end of the cold war recent ec reforms that increase monetary stability intra european trade and political attention are all likely to maintain or increase citizen support for the ec these findings result from a model that blends comparative political economy with international relations in one of the first applications of pooled cross sectional and time series analysis to the comparative study of public opinion

support for foreign ownership and integration in eastern europe economic interests ideological commitments and democratic context western models of popular support for economic integration usually stress costs and benefits this article suggests that one cannot ignore the predominance of socialist economic values in east central europe consequently it is argued and supported that a individual level support for foreign ownership is best explained by ideological commitments to market ideals b publics in more economically liberal countries more strongly support the idea of foreign ownership and c citizens who reside in democratic countries which experience greater controversy over foreign ownership are less likely to accept the idea of foreign ownership just as they have a more negative image of the european union theoretically the study documents the limited applicability to eastern europe of western based models practically it helps explain opposition to foreign ownership and more generally increasing controversy over the eu in first wave accession states