SSE/EFI Working Paper Series in Economics and Finance,
Stockholm School of Economics

Abstract: This paper studies the evolution of peoples' models of how other people think -- their theories of mind. First, this is formalized within the level-k model, which postulates a hierarchy of types, such that type k plays a k times iterated best response to the uniform distribution. It is found that, under plausible conditions, lower types co-exist with higher types. The results are extended to a model of learning, in which type k plays a k times iterated best response the average of past play. The results are also extended to the cognitive hierarchy model, and to the introduction of a type that plays a Nash equilibrium.

Keywords: Theory of Mind; Evolution; Learning; Level-k; Fictitious Play; Cognitive Hierarchy

JEL-codes: C73; D83

53 pages, First version: May 4, 2010. Revised: March 20, 2012. Earlier revisions: May 12, 2010, May 14, 2010, May 31, 2010, June 1, 2010, June 2, 2010, June 9, 2011, June 9, 2011, November 24, 2011, February 8, 2012.

Full text files

hastef0728.pdf  Full text

Download statistics

• Stockholm School of Economics
• Home page for this series

Questions (including download problems) about the papers in this series should be directed to Helena Lundin ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2024-02-11 18:19:16.