Abstract

Much work in game theory concerns mechanisms by which players can infer information about the utilities and beliefs of other players based on actions within games and pre-play signals. When game theory is applied to interactions among people, such analysis interprets them as ‘mindreading’. Recent work in cognitive science, however, suggests that human coordination rests more centrally on ‘mindshaping’, where interactants determine preferences jointly. As mindshaping is strategic, there is motivation to extend game theory to accommodate it. Conditional Game Theory (CGT) is a strategic theory of mindshaping. We show how it can be used to help players of standard games identify correlated equilibrium, and thus solve games. We then extend CGT to address a challenge to the relevance of correlated equilibrium to empirical choice data, by showing how pre-play analysis using CGT can reconcile the Harsanyi Doctrine – assumed common priors among Bayesian players – with rank-dependent choice as observed in economic experiments.