Copyright c © 1998, American Economic Association. Reproduced with permission of the American Economic Review. Games with Procedurally Rational Players

We study interactive situations in which players are boundedly ra-tional. Each player, rather than optimizing given a belief about the other players ’ behavior, as in the theory of Nash equilibrium, uses the following choice procedure. She first associates one consequence with each of her actions by sampling (literally or virtually) each of her actions once. Then she chooses the action that has the best consequence. We define a notion of equilibrium for such situations and study its properties. (JEL C72