Behavioral Game Theory

At the heart of game theory is the notion that we can strip away details of a particular setting to focus on the key strategic incentives that matter. Hence, two very different looking settings can give rise to the same game. For example, contributing to charity may be strategically equivalent to not dropping litter. This stripping away of detail makes game theory a 'general theory' rather than a list of case studies. But, the constant danger is to strip away details that matter.       Framing effects are one illustration of this danger. Daniel Kahneman and Amos Tversky very powerfully illustrated that people can make different decisions depending on how a decision is framed. (See, for example, their 1981 article in Science on ' the framing of decisions and psychology of choice '.) Strategically irrelevant aspects of a setting may, therefore, matter. Recent years have seen a burgeoning number of studies looking at framing effects in public good games. The basic ques...