Theme 5: Interdependent Decision Making
The outcomes of many decisions that people make strongly depend on other agents’ behaviour. Examples are negotiations, teamwork, markets, etc. In these situations an individual’s outcomes are at least partially determined by the behaviour of others, and vice-versa. Such mutual dependence can be modelled using Game theory. The assumption of rational and self-interested actors incorporated in Game theory frequently leads to a mismatch between Game-theoretic predictions and empirical findings. Research within this theme investigates both Game-theoretic predictions as well as the determinants of deviations from these predictions.