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Strategic interaction occurs whenever it depends on others what one finally obtains: on markets, in firms, in politics etc. Game theorists analyse such interaction normatively, using numerous different methods. The rationalistic approach assumes perfect rationality whereas behavioral theories take into account cognitive limitations of human decision makers. In the animal kingdom one usually refers to evolutionary forces when explaining social interaction. The volume contains innovative contributions, surveys of previous work and two interviews which shed new light on these important topics of...

A social dilemma is a game which at first glance has only inefficient solutions. If efficient solutions are to be achieved, some kind of cooperation among the players is required. This book asks two basic questions, closely intertwined with each other: 1. How is cooperation possible among rational players in such a social dilemma? Which changes in the social context of a social dilemma situation are necessary in order for players to rationally choose the cooperative option? 2. How do real players actually behave in social dilemma situations? Do they behave "rationally" at all? Or, conversely,...

The book reports on recent experimental research on expectations and decision making in bargaining, markets, auctions, or coalition formation situations. The investi- gated topics deliver building stones for a bounded rational theory as an approach to explain behavior and interpersonal interactions in economic and social relationships.