I would guess that people don’t actually compute the Nash equilibrium or expect other people to.
Instead, they use the same heuristic reasoning methods that they evolved to learn, and which have served them well in social situations their entire life, and expect other people to do the same.
I think we should expect these heuristics to be close to rational (not for the utilities of humans, but for the fitness of genes) in the ancestral environment. But there’s no particular reason to think they’re going to be rational by any standard in games chosen specifically because the Nash equilibrium is counterintuitive to humans.
I would guess that people don’t actually compute the Nash equilibrium or expect other people to.
Instead, they use the same heuristic reasoning methods that they evolved to learn, and which have served them well in social situations their entire life, and expect other people to do the same.
I think we should expect these heuristics to be close to rational (not for the utilities of humans, but for the fitness of genes) in the ancestral environment. But there’s no particular reason to think they’re going to be rational by any standard in games chosen specifically because the Nash equilibrium is counterintuitive to humans.