  In the last few decades, numerous experiments have shown that humans do not
always behave so as to maximize their material payoff. Cooperative behavior
when non-cooperation is a dominant strategy (with respect to the material
payoffs) is particularly puzzling. Here we propose a novel approach to explain
cooperation, assuming what Halpern and Pass (2013) call "translucent players".
Typically, players are assumed to be "opaque", in the sense that a deviation by
one player does not affect the strategies used by other players. But a player
may believe that if he switches from one strategy to another, the fact that he
chooses to switch may be visible to the other players. For example, if he
chooses to defect in Prisoner's Dilemma, the other player may sense his guilt.
We show that by assuming translucent players, we can recover many of the
regularities observed in human behavior in well-studied games such as
Prisoner's Dilemma, Traveler's Dilemma, Bertrand Competition, and the Public
Goods game.
