Games and Markets
The last of the three chapters on consequences for the decision sciences looks at strategic and economic decisions, a vast part of the chapter being dedicated to a certain simultaneous market entry game. That game turns out to be interesting from the perspective of the multiverse because it is characterized by multiple Nash equilibria and hence by substantial uncertainty on the side of the players as to what strategy to choose (Rapoport 1995). In the literature, some of the experimental findings in those games have jestingly been called ‘magic’ (Kahneman 1988), because it is hard to make sense of players’ coordination success in those games. The chapter will show that part of the ‘magic,’ e.g., part of the experimental findings by Rapoport (1995), becomes reasonable when applying a clustered-minds multiverse perspective, and that those findings are informative in turn for the development of the theory of the clustered-minds multiverse – by helping to better understand the clustering by individuals. Experiments on other market entry situations (i.e., Camerer and Lovallo 1999) as well as games against computers will also be analyzed through the lens of the multiverse.