Play Communication and the Consequences of Imitation
{'Code': '04050100', 'Directorate': {'Abbreviation': 'SBE', 'LongName': 'Direct For Social, Behav & Economic Scie'}, 'Division': {'Abbreviation': 'SES', 'LongName': 'Divn Of Social and Economic Sciences'}}
{'SignBlockName': 'Daniel H. Newlon', 'PO_EMAI': None, 'PO_PHON': None}
The introduction of information acquisition and information                     processing into economic models of decision making was a major                  breakthrough in the realism and the relevance of economics.  The                paradigm of information economics provided new insights in almost               every area of economic research.  One currently popular model                   treats economic agents with private information as games of                     incomplete information.  Such models have penetrated most fields                of economics, falling under the rubrics of signalling, screening,               sorting, adverse selection, and mechanism design.  Very few of                  these applied models allow agents to talk to each other, despite                the obvious prevalence of conversation and other types of                       communication in reality.                                                                                                                                       The central premise of this project is that communication should                be explicitly incorporated in a game-theoretic way into economic                models.  Some of this research is in the context of two                         applications.  The first consists of voting-political situations                in which speechmaking plays an important role; the goal is to                   rationalize the role of political rhetoric.  The second                         application is to bilateral trading, studying the effect of                     communication between traders whose preferences are private                     information on resource allocation.  The double auction is taken                as the prototype trading institution.                                                                                                                           The project also develops a novel approach to bounded                           rationality.  Introspection tells us that the knowledge,                        computational powers, and complexity of the strategies assumed of               individuals in economic models is beyond realistic belief.  But                 rational choice models have not been displaced by alternatives                  because rational choice models perform well and the alternative                 models are descriptive and invariably break down.  The model                    developed in this project differs from past work in that bounds                 are imposed on the individual's ability to compute, rather than                 on the complexity of the strategies.  The key assumption of this                model is that a boundedly rational individual confronted by                     circumstances for which he cannot, at the present time, calculate               an optimal action for himself, will imitate others.                                                                                                             Both of these lines of research are very exciting.  Preliminary                 work shows that existing bargaining models can make seriously                   wrong predictions by ignoring pre-play communications.  This                    project would correct the biases in these widely used economic                  models.  The development of a tractable formal theory of bounded                rationality would be a major breakthrough in economics.  This new               theory could explain some of the empirical problems with models                 that assume completely rational behavior by economic agents.
{'FirstName': 'Steven', 'LastName': 'Matthews', 'PI_MID_INIT': 'A', 'PI_SUFX_NAME': None, 'PI_FULL_NAME': 'Steven A Matthews', 'EmailAddress': 'stevenma@ssc.upenn.edu', 'NSF_ID': '000468641', 'StartDate': '08/15/1988', 'EndDate': None, 'RoleCode': 'Principal Investigator'}
{'Name': 'Northwestern University', 'CityName': 'EVANSTON', 'ZipCode': '602080001', 'PhoneNumber': '3125037955', 'StreetAddress': '633 CLARK ST', 'StreetAddress2': None, 'CountryName': 'United States', 'StateName': 'Illinois', 'StateCode': 'IL', 'CONGRESSDISTRICT': '09', 'CONGRESS_DISTRICT_ORG': 'IL09', 'ORG_UEI_NUM': 'EXZVPWZBLUE8', 'ORG_LGL_BUS_NAME': 'NORTHWESTERN UNIVERSITY', 'ORG_PRNT_UEI_NUM': None}
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{'Code': '1320', 'Text': 'Economics'}
{'url': 'https://www.nsf.gov/awardsearch/download?DownloadFileName=1988&All=true', 'xml': '8810615.xml'}