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Wendelin Reich: Reasoning About Other Agents |
 | | Both agents carry out social meta-reasoning in response to observable behavior and both agents assume that the respective other carries it out (e.g., agent 1 when she interprets agent 2's small adjustment as "goodwill"; agent 2 when he reconstructs agent 1's reconstruction of his own subjective valuation of the good). |
 | | Likewise, reasoning such as, "A drastically adjusted price reveals that the agents believes her good is worth little" cannot be represented in classical game theory because it involves incomplete information, and it cannot be represented as a game of incomplete information (e.g., a signaling game, Owen 1995: p. |
 | | Thus, agents can be characterized as processes that apply rules to their own properties according to the laws of a specific logical calculus, thereby transforming a set of initial states (e.g., perceptions) into a set of final states (e.g., actions). |
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