Coevolution of deception and preferences: Darwin and Nash meet Machiavelli

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Coevolution of deception and preferences: Darwin and Nash meet Machiavelli. / Mohlin, Erik; Heller, Yuval.

In: Games and Economic Behavior, Vol. 113, 2019, p. 223-247.

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TY - JOUR

T1 - Coevolution of deception and preferences: Darwin and Nash meet Machiavelli

AU - Mohlin, Erik

AU - Heller, Yuval

PY - 2019

Y1 - 2019

N2 - 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.

AB - 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.

KW - Evolution of preferences, Indirect evolutionary approach, Theory of mind, Depth of reasoning, Deception, Efficiency

U2 - 10.1016/j.geb.2018.09.011

DO - 10.1016/j.geb.2018.09.011

M3 - Article

VL - 113

SP - 223

EP - 247

JO - Games and Economic Behavior

T2 - Games and Economic Behavior

JF - Games and Economic Behavior

SN - 0899-8256

ER -