ESSAYS ON FORWARD-LOOKING BEHAVIOR IN STRATEGIC INTERACTIONS

The general topic of our thesis is forward looking behavior in strategic situations.
Mixing theoretical and experimental analysis, we document how strategic thinking
is affected by the specific features of a dynamic interaction. The overarching result
is that the information regarding decisions that are close to the current one, receive
a qualitatively different consideration, with respect to distant ones. That is, the
actual decisions are based on reasoning over a limited number of steps, close to
actual decison node. We capture this feature of behavior both in a strategic (limited
backward induction) and in a non-strategic (limited farsightedness) set up, and we
identify relevant consequences on the outcome of the interaction, which powerfullly
explain many observed experimental regularities.