An exploration of Type Indeterminacy in strategic Decision-making

Abstract. In this paper we explore an extension of the Type Indetermi-nacy model of decision-making to strategic decision-making. A 2×2 game is investigated. We first show that in a one-shot simultaneous move set-ting the TI-model is equivalent to the standard Bayes-Harsanyi model. We then let the game be preceded by a cheap-talk promise game. We show in an example that in the TI-model the promise stage can have an impact on the next following behavior while the standard Bayes-Harsanyi model predicts no impact whatsoever. The TI approach differs from other behavioral approaches in identifying the source of the effect of cheap-talk promises in the intrinsic indeterminacy of the players ’ type