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Coevolution of Deception and Preferences: Darwin and Nash Meet Machiavelli

Heller, Yuval and Mohlin, Erik (2017): Coevolution of Deception and Preferences: Darwin and Nash Meet Machiavelli. Forthcoming in: Games and Economic Behavior No. Forthcoming

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We develop a framework in which individuals preferences co-evolve with their abilities to deceive others regarding their preferences and intentions. We show that a pure outcome is stable, essentially if and only if it is an efficient Nash equilibrium. All individuals have the same deception ability in such a stable state. In contrast, there are non-pure outcomes in which non-Nash outcomes are played, and different deception abilities co-exist. We extend our model to study preferences that depend also on the opponent's type.

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