Beyond Coincidence: The Reasoning Process Underlying Utility Proportional Beliefs Process

Abstract

Abstract We provide insights into (Bach, Christian W., and Andrés Perea’s. 2014. “Utility Proportional Beliefs.” International Journal of Game Theory: 1–22) concept of utility proportional beliefs and characterize its underlying reasoning process in normal-form games. Our analysis suggests that assumptions on the sensitivity to utilities influence players’ reasoning process and therefore the computations necessary to obtain a belief about the opponent. Under the assumption that more complex computations take longer to complete, we develop additional hypotheses about the players’ reaction times. These additional hypotheses allow for more rigorous testing of the concept than pure accordance with predictions. Using (Nauerz, Christian T., Marion Collewet, and Frauke Meyer. 2015. “Explaining Beliefs in Strictly Competitive One-shot Games.” Working Paper) data set we confirm our hypotheses about players’ reaction times, strengthening our trust in the concept.