Lt (although in an unknown way) and try to estimate her

Lt (although in an unknown way) and try to estimate her minimum acceptable offer (MAO) with this incomplete information. A different approach was proposed by Rabin [9], who developed a theory of fairness Anlotinib price equilibria for two-player games in normal form. His model is motivated by the fact that people behave nicely to those who treat them nicely and punish those who are not nice to them, with both motivations having a greater effect on behavior as the material cost of sacrificing becomes smaller. Such model includes a representation of subjective judgements and beliefs of the players, based on the psychological games framework of Geanakoplos [19]. In order to analyze this model [3] [20], let ai be the strategy chosen by player i, bj player i’s belief about the strategy chosen by player j, and ci player i’s belief about the player j’s belief about the strategy chosen byPLOS ONE | DOI:10.1371/journal.pone.0158733 July 6,3 /Emotions and Strategic Behaviour: The Case of the Ultimatum Gameplayer i. Then, the utility function (social preference) is defined as: Ui i ; bj ; ci ??pi i ; bj ?? j j ; ci ?? j j ; ci i i ; bj ?f f where i(ai, bj) is the monetary payoff to player i, fi i ; bj ?? j j ; ai ??pfair j = max j ??j j min ; c ?? ; b ??pfair = max ??p is player i’s kindness toward player j, f ij j j j i i i j i i ipmin 1 is the perceived kindness by player i with respect to how she is being treated by player 1 j, pmax j ?and pmin j ?are respectively the highest and lowest possible payoffs for player j, and j j pfair j ?is an equitable fair payoff defined as the Bayer 41-4109 cost average of the highest and lowest payoffs. j In order to make the model more tractable and define a fairness equilibrium, Rabin assumes that players are willing to maximize their social utilities and that all higher-order beliefs match actual behavior (i.e ai = bj = ci) [3]. Again, from our viewpoint such an equilibrium concept is built upon the emotional response of the players (how kindly they feel they are treated) and the assumption that players know with certainty the beliefs of other players, what seems very unrealistic in our opinion. Much like in the discussion above, this model lacks a description and characterization of the mechanisms behind the emotional responses. It is also important to note the intuitive idea of a fair payoff being defined as the average of the maximum and minimum, as this point will become relevant later in our discussion. Finally, another, more recent approach that explicitly points to emotions in the development of an utility function is that of Cox et al [20]. They include a parameter (r, s) to represent the emotional state of a given player, as the willingness to pay own for other’s payoff at an allocation on the equal line xi = xj. It is introduced as an increasing function on both reciprocity (r) and the status (s), and they assume it to be identical across individuals except for a mean zero idiosyncratic term. The utility for the allocation x = xi, xj is then defined as: ( ? a ?yxa ?a if a 2 1; 0?[ ?; 1 ui ?i j?xi xjyifa?where is a parameter to be determined experimentally. Once the authors treat the emotion as a function (r, s) they are forced to make further assumptions on how reciprocity and status are introduced. It seems unnecessary then to call such a variable emotional state, since it remains unclear what the role and mechanism of actual emotions are. Indeed the influence arises from both r and s, and any.Lt (although in an unknown way) and try to estimate her minimum acceptable offer (MAO) with this incomplete information. A different approach was proposed by Rabin [9], who developed a theory of fairness equilibria for two-player games in normal form. His model is motivated by the fact that people behave nicely to those who treat them nicely and punish those who are not nice to them, with both motivations having a greater effect on behavior as the material cost of sacrificing becomes smaller. Such model includes a representation of subjective judgements and beliefs of the players, based on the psychological games framework of Geanakoplos [19]. In order to analyze this model [3] [20], let ai be the strategy chosen by player i, bj player i’s belief about the strategy chosen by player j, and ci player i’s belief about the player j’s belief about the strategy chosen byPLOS ONE | DOI:10.1371/journal.pone.0158733 July 6,3 /Emotions and Strategic Behaviour: The Case of the Ultimatum Gameplayer i. Then, the utility function (social preference) is defined as: Ui i ; bj ; ci ??pi i ; bj ?? j j ; ci ?? j j ; ci i i ; bj ?f f where i(ai, bj) is the monetary payoff to player i, fi i ; bj ?? j j ; ai ??pfair j = max j ??j j min ; c ?? ; b ??pfair = max ??p is player i’s kindness toward player j, f ij j j j i i i j i i ipmin 1 is the perceived kindness by player i with respect to how she is being treated by player 1 j, pmax j ?and pmin j ?are respectively the highest and lowest possible payoffs for player j, and j j pfair j ?is an equitable fair payoff defined as the average of the highest and lowest payoffs. j In order to make the model more tractable and define a fairness equilibrium, Rabin assumes that players are willing to maximize their social utilities and that all higher-order beliefs match actual behavior (i.e ai = bj = ci) [3]. Again, from our viewpoint such an equilibrium concept is built upon the emotional response of the players (how kindly they feel they are treated) and the assumption that players know with certainty the beliefs of other players, what seems very unrealistic in our opinion. Much like in the discussion above, this model lacks a description and characterization of the mechanisms behind the emotional responses. It is also important to note the intuitive idea of a fair payoff being defined as the average of the maximum and minimum, as this point will become relevant later in our discussion. Finally, another, more recent approach that explicitly points to emotions in the development of an utility function is that of Cox et al [20]. They include a parameter (r, s) to represent the emotional state of a given player, as the willingness to pay own for other’s payoff at an allocation on the equal line xi = xj. It is introduced as an increasing function on both reciprocity (r) and the status (s), and they assume it to be identical across individuals except for a mean zero idiosyncratic term. The utility for the allocation x = xi, xj is then defined as: ( ? a ?yxa ?a if a 2 1; 0?[ ?; 1 ui ?i j?xi xjyifa?where is a parameter to be determined experimentally. Once the authors treat the emotion as a function (r, s) they are forced to make further assumptions on how reciprocity and status are introduced. It seems unnecessary then to call such a variable emotional state, since it remains unclear what the role and mechanism of actual emotions are. Indeed the influence arises from both r and s, and any.