Does Amy Know Ben Knows You Know Your Cards? A Computational Model of Higher-Order Epistemic Reasoning

Reasoning about what other people know is an important cognitive ability, known as epistemic reasoning, which has fascinated psychologists, economists, and logicians. In this paper, we propose a computational model of humans’ epistemic reasoning, including higher-order epistemic reasoning—reasoning about what one person knows about another person’s knowledge—that we test in an experiment using a deductive card game called “Aces and Eights”. Our starting point is the model of perfect higher-order epistemic reasoners given by the framework of dynamic epistemic logic. We modify this idealized model with bounds on the level of feasible epistemic reasoning and stochastic update of a player’s space of possibilities in response to new information. These modifications are crucial for explaining the variation in human performance across different participants and different games in the experiment. Our results demonstrate how research on epistemic logic and cognitive models can inform each other