Cooperative and competitive reasoning: From games to revolutions

Abstract

I introduce a novel solution concept, team level-$k$, in games of incomplete information. The model generalizes level-$k$ and team reasoning models, and provides a unified explanation for several important phenomena in social dilemmas. In Rubinstein’s Email Game, players successfully coordinate upon receiving sufficient messages. In coordination games, the model explains several experimental facts that cannot be accounted for by global games, particularly the fact that there is greater coordination between people with public rather than private information, which has important policy implications. A generalization of the model relaxes the epistemic requirements for cooperative behavior, which I apply to study collective action and revolutions. Although the government attempts to manipulate citizen perceptions of the fundamentals, they might be able to coordinate if the fundamentals are sufficiently in their favor.