How Do Players Differ?
How Do Players Differ? Thus far, we’ve discussed how people are similar: they have well-defined prefer- ences, self-awareness, and a theory-of-mind mechanism. But how do they differ? Three forms of individual heterogeneity are especially relevant to game theory. First, although each person is assumed to have complete and transitive preferences, those preferences can vary across people. For instance, Grace may prefer AT&T, while Lisa prefers Verizon. Tony may like the Red Sox and detest the Yankees, while Johnny is just the opposite. Second, people can have differ- ent options and opportunities. For example, a wealthy bidder at an auction has a different set of options than another bidder with lower net worth. Third, people
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