On Coordination in Non-Cooperative Game Theory: Explaining How and Why an Equilibrium Occurs and Prevails

Acknowledgments
Contents
Abbreviations
List of Figures
List of Tables
1 Introduction
	1.1 What is Game Theory?
	1.2 The Solution Concept: The Two Visions of the System of Force Versus the System of Relation Views of Economics
	1.3 Why Focus on Coordination? What is Coordination?
	1.4 The Impact of the Type of Players and of Their Rationality in Games
	1.5 Bayesianism in Game Theory: On Decision Theory and Game Theory
	1.6 Interest in the Inclusion of Psychology and Players’ Reasoning Process
	1.7 The Organization of the Book
	References
2 A Critical Assessment of the Evolution of Standard Game Theory
	2.1 Introduction
	2.2 On the Foundations of Classical Game Theory
		2.2.1 Von Neumann and Morgenstern’s Contribution
		2.2.2 Nash’s Program
		2.2.3 The Refinement Program
	2.3 From Harsanyi’s (1967–68) Contribution and the Introduction of Players’ Hierarchy of Beliefs to the Birth of the Epistemic Program in Game Theory
		2.3.1 Harsanyi’s Introduction of Uncertainty in Game Theory
		2.3.2 The Birth of the Epistemic Program in Game Theory
		2.3.3 The Standard Hypotheses of Epistemic Game Theory
		2.3.4 The Main Solution Concepts of Epistemic Game Theory
	2.4 Addressing a Methodological Assessment of the Epistemic Program of Game Theory
		2.4.1 On the Prior Assumptions and the Nature of Probabilities it Implies: The Methodological Consequences on Players’ Beliefs
		2.4.2 What Kind of Players Peopled the Epistemic Games
		2.4.3 Rationality and Reasoning: Are They Compatible?
		2.4.4 Mentalism Versus Behaviorism
	2.5 Conclusion
	References
3 Schelling’s Reorientation of Game Theory: Toward a Theory of Interdependent Decisions
	3.1 T. C. Schelling: A Dissent Economist?
	3.2 Schelling’s Reorientation of Game Theory
		3.2.1 What Is the Essence of Game Theory and What Are the Limitations He Identifies in Classical Game Theory
		3.2.2 Schelling’s Reorientation of GT
		3.2.3 The Social Ontology Behind Schelling’s Theory of Strategy
	3.3 The Models of Residential Segregation
		3.3.1 The Purpose of the Models
		3.3.2 The Models
		3.3.3 Some Methodological Insights
	3.4 How Schelling Challenges Standard Methodological Individualism
		3.4.1 What is a Player?
		3.4.2 What Is Strategic Rationality?
		3.4.3 Epistemological Implications for Theories and Models
	3.5 Conclusion
	References
4 Bacharach: How the Variable Frame and Team Reasoning Theories Challenge Standard Noncooperative Game Theory
	4.1 M. Bacharach: An Interdisciplinary Fellow
	4.2 Setting the Epistemological Ground for Bacharach’s Contribution to Game Theory
		4.2.1 On the Importance of Individual Economic Agents’ Perceptions
		4.2.2 A Critical Assessment of Standard Game Theory
	4.3 Bacharach’s “Variable Frame Theory” and Coordination
		4.3.1 Framing and Gaming
		4.3.2 The “Status” of the Game: What is a Payoff Matrix?
		4.3.3 Game Solutions and Focal Points: Which Principle of Equilibrium Selection?
	4.4 Bacharach’s Team Reasoning Theory: A Theory of Cooperation or of Coordination?
		4.4.1 Drawing Boards and Evolutions
		4.4.2 Is Cooperation Naturally or “Interactionally” Based? How Can Multiple Selves be Reconciled?
		4.4.3 Salience and the “Endogenization Problem”
	4.5 A Rational Reconstruction of the Enrichment to Standard Noncooperative Game Theory Provided by VFT and TR: A New Conception of Players and their Rationality
		4.5.1 Which Conception of Players?
		4.5.2 Which “Psychologies” Does Bacharach Draw on to Portray the Players in his Games?
		4.5.3 A Different Conception of Strategic Rationality: Challenging the Individualism Hypothesis
	4.6 Conclusion
	References
5 A New Frame for Intersubjectivity in Game Theory: The Insights of the Theories of Mind and Simulation
	5.1 Introduction
	5.2 On Intersubjectivity and Empathy in Game Theory: A Very Restrictive Integration
		5.2.1 Binmore’s Tentative to Bring Empathy in the Realm of Game Theory
		5.2.2 The Other-Regarding Preferences Literature
		5.2.3 Schelling–Bacharach’s Perspective
	5.3 The Cognitive Approach of Mindreading and the Rise of Theory-Theory (TT)
		5.3.1 The Premises of the TT
		5.3.2 The Philosophy of Mind and Common Sense Psychology
		5.3.3 The Theory-Theory Paradigm (TT)
		5.3.4 A Representation of the Mechanism of Attribution According to the TT
		5.3.5 Rationality Theory
	5.4 Simulation Theory (ST)
		5.4.1 The ST Paradigm
		5.4.2 Simulation With and Without Introspection: The Distinction Between High-Level and Low-Level Mindreading
		5.4.3 Failure of Mindreading: Egocentric Biases and Lack of Quarantine
		5.4.4 The Different Forms of ST
	5.5 Intersubjectivity Without Mentalization
		5.5.1 The Direct Social Perception Thesis (DSP)
		5.5.2 The Mindshaping Hypothesis
	5.6 Conclusion
	References
6 On the Use of Mindreading and Mindshaping in Game Theory: Incorporation of Players’ Mental States and Endogenization of Players’ Beliefs
	6.1 Introduction
	6.2 Coordination Games as “Open” Decision Problems
		6.2.1 Two Illustrations of Open Decision Problems
		6.2.2 Small Worlds, Large Worlds, and the Grand World
		6.2.3 The Role of Mindshaping and Focal Points in Cognitive Homogenization and Coordination
	6.3 A Model of Strategic Reasoning in Small Worlds
		6.3.1 Simulation and the Formation of Players’ Beliefs
		6.3.2 The Formalization of Simulation Theory in Games
		6.3.3 Reaching Consistent Beliefs: The Massaging Process
	6.4 Subjective Belief Equilibrium
		6.4.1 The Massaged Belief Hierarchy and the Subjective Belief Equilibrium
		6.4.2 Illustration: Prisoner’s Dilemma
		6.4.3 Simulation, Ratifiability, and Action-Dependent Beliefs
	6.5 Extending the Players’ Choice Problem to Large Worlds
		6.5.1 Preliminaries
		6.5.2 From Large to Small Worlds
		6.5.3 Focal Points
		6.5.4 Mindshaping and the Formation of Prior Beliefs
	6.6 Conclusion
	References
7 General Conclusion
	References
Appendix