Strategic Reasoning: Building Cognitive Models from Logical Formulas

This paper presents an attempt to bridge the gap between logical and cognitive treatments of strategic reasoning in games. There have been extensive formal debates about the merits of the principle of backward induction among game theorists and logicians. Experimental economists and psychologists have shown that human subjects, perhaps due to their bounded resources, do not always follow the backward induction strategy, leading to unexpected outcomes. Recently, based on an eye-tracking study, it has turned out that even human subjects who produce the outwardly correct ‘backward induction answer’ use a different internal reasoning strategy to achieve it. The paper presents a formal language to represent different strategies on a finer-grained level than was possible before. The language and its semantics help to precisely distinguish different cognitive reasoning strategies, that can then be tested on the basis of computational cognitive models and experiments with human subjects. The syntactic framework of the formal system provides a generic way of constructing computational cognitive models of the participants of the Marble Drop game.