Coevolution of deception and preferences: Darwin and Nash meet Machiavelli

Research output: Contribution to journalArticle

Abstract

We develop a framework in which individuals' preferences coevolve with their abilities to deceive others about their preferences and intentions. Specifically, individuals are characterised by (i) a level of cognitive sophistication and (ii) a subjective utility function. Increased cognition is costly, but higher-level individuals have the advantage of being able to deceive lower-level opponents about their preferences and intentions in some of the matches. In the remaining matches, the individuals observe each other's preferences. Our main result shows that, essentially, only efficient outcomes can be stable. Moreover, under additional mild assumptions, we show that an efficient outcome is stable if and only if the gain from unilateral deviation is smaller than the effective cost of deception in the environment.

Details

Authors
Organisations
External organisations
  • Bar-Ilan University
Research areas and keywords

Subject classification (UKÄ) – MANDATORY

  • Economics

Keywords

  • Evolution of preferences, Indirect evolutionary approach, Theory of mind, Depth of reasoning, Deception, Efficiency
Original languageEnglish
Pages (from-to)223-247
JournalGames and Economic Behavior
Volume113
Early online date2018 Sep 27
Publication statusPublished - 2019
Publication categoryResearch
Peer-reviewedYes