  We develop a general game-theoretic framework for reasoning about strategic
agents performing possibly costly computation. In this framework, many
traditional game-theoretic results (such as the existence of a Nash
equilibrium) no longer hold. Nevertheless, we can use the framework to provide
psychologically appealing explanations of observed behavior in well-studied
games (such as finitely repeated prisoner's dilemma and rock-paper-scissors).
Furthermore, we provide natural conditions on games sufficient to guarantee
that equilibria exist.
