Behavioral Game Theory
Pinkel Lecture

Colin Camerer's specialty in the last few years has been "behavioral game theory", a subfield (or "franchise") of behavioral economics which uses experimental evidence to establish how psychological limits on the ability to make calculations and plan ahead, the way in which people react to fairness, and learning from experience, influence behavior in situations described by "game theory". Game theory is a mathematical analysis of any social situation in which one player-- typically a person, but possibly a firm or nation-- tries to figure out what other players will do, and choose the best strategy given those guesses about others. Most game theory describes the fictional behavior of an ideal, hypercalculating, emotionless player (like Dr. Spock from Star Trek) and, as a result, is not always a good guide to how normal people who don't plan too far ahead will actually behave. My 2003 book Behavioral Game Theory describes hundreds of different experimental studies which show where game theory predicts well and predicts poorly, and suggests some new kinds of theory. Behavioral game theory gives precise predictions about how people who think only a couple of steps ahead, have both guilt and envy toward others, and learn from experience, are likely to behave.