On behavioral decision and game theory

The behavioral approach in the sense of studying decision-making in the light of observed choice behavior has a long tradition in psychology. Psychologists, for instance, proposed the idea of forming self-generated aspiration levels long before bounded rationality and satisfying behavior became topics in economics and considerably contributed to behavioral research. Most economists are still reluctant to question the – in economics traditional – rational choice assumption and refer to deviations of actual from optimal behavior as anomalies for which they account by slightly generalizing optimality in ways rendering observed behavior optimal. When the same ideas like reciprocity or fairness concerns seem to explain many deviations from what would be materially optimal, this is and has been very informative for behavioral research. Nevertheless, generalizing optimality neglects how actual human decision-makers cognitively perceive decision and game-playing tasks and are emotionally affected by them.