In 1982, Milgrom and Stokey proved a remarkable “Groucho Marx theorem”: If rationality is common knowledge, risk-averse players should not make speculative bets with one another (unless they have hedging motives). Of course, speculation goe…Finally, the ultimate goal of the laboratory honing of simple models is to explain behavior in the economy. Models of iterated thinking could prove useful in thinking about asset markets, speculation and betting, contract structure, and oth…In our experiments, subjects played five entry games with no feedback. If the number of entrants was above (less than or equal to) $d$, the entrants earned 0 ($1); nonentrants earned $.50. Subjects also played 22 matrix games with mixed equ…
Crawford
other · 3 mentions across 1 reading
In this course
Crawford appears in these readings as an economist whose work on experimental game theory and bounded rationality informs how the course thinks about decision-making under uncertainty and strategic interaction. The excerpts situate Crawford's laboratory experiments—particularly on entry games and iterated thinking—as foundational to understanding how agents actually behave when facing speculative choices, market dynamics, and equilibrium problems that deviate from rational actor assumptions. His empirical methods represent a key bridge between abstract game-theoretic models and the messy behavioral realities that matter for thinking about AI systems navigating economic and social coordination problems.
Mentioned in 1 reading
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