The Effectiveness of Higher-Order Theory of Mind in Negotiations

Harmen de Weerd, Rineke Verbrugge, Bart Verheij

When the outcome of a decision you make depends on the actions of others, it is important to be able to predict those actions. To facilitate this process, people reason about unobservable mental content of others, such as beliefs, desires, and intentions. People can also use this so-called theory of mind recursively, and reason about the way others make use of theory of mind. For example, to understand a sentence such as `Alice believes that Bob knows that Carol is throwing him a surprise party', the reader has to use second-order theory of mind, by reasoning about the way Alice reasons about Bob's knowledge. Behavioral experiments have demonstrated that people make use of higher- order (i.e. at least second-order) theory of mind [1, 2]. However, the extent to which non-human species are able to use theory of mind of any kind is under debate [3, 4]. The human ability to make use of higher-order theory of mind suggests that there may be settings in which this ability provides individuals with enough of an evolutionary advantage to support the emergence of reasoning about the minds of others, and even to use this ability recursively. One possible explanation is that higher-order theory of mind is needed to engage effectively in mixed-motive interactions [5] such as negotiation. Mixed-motive interactions involve partially overlapping goals, so that these interactions are neither fully cooperative nor fully competitive. In this paper, we make use of agent-based computational models to determine whether the use of higher orders of theory of mind allows agents to reach better outcomes in negotiation, both in terms of individual agent performance as well as in terms of social welfare.

Manuscript (in PDF-format)

De Weerd, H., & Verheij, B. (2014). The Effectiveness of Higher-Order Theory of Mind in Negotiations. Proceedings of the Workshop on Reasoning About Other Minds: Logical and Cognitive Perspectives (RAOM 2014). Groningen, The Netherlands, August 4, 2014. CEUR Workshop Proceedings 1208 (eds. Szymanik, J., & Verbrugge, L.C.), 35-39. Aachen:

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