Schelling Formalized: Strategic Choices of Non-Rational Personas

Abstract

We introduce a framework that explains non-rationality in non-repeated games. In our framework a player i adopts a binding "persona" - a temporary utility function --- that they honestly signal before play. By adopting a "non-rational" persona, i may cause changes in their opponents' behavior that increases $i$'s true utility. We use this framework to explain experimental data in the Traveler's Dilemma and to show how cooperation can arise in the Prisoner's Dilemma (PD). We then predict a crowding out phenomenon in the PD. We also predict a tradeoff between the robustness and the benefit of cooperation in the PD.