  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 call translucent players.
Typically, players are assumed to be opaque, in the sense that a deviation by
one player in a normal-form game 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.
