The Architecture of Illusion: Network Opacity and Strategic Escalation
Raman Ebrahimi, Sepehr Ilami, Babak Heydari, Isabel Trevino, Massimo Franceschetti

TL;DR
This paper introduces the Connected Minds model, unifying bounded rationality frameworks by incorporating network bias and opacity, revealing how transparency influences strategic behavior and equilibrium outcomes.
Contribution
It develops a unified model linking Cognitive Hierarchy and Level-k theories through network opacity, and derives mechanisms to control strategic escalation via transparency adjustments.
Findings
Network opacity causes overestimation of opponents' cognitive depth.
Transparency levels influence effort and coordination in strategic games.
Model provides actionable insights for designing information disclosure policies.
Abstract
Standard models of bounded rationality typically assume agents either possess accurate knowledge of the population's reasoning abilities (Cognitive Hierarchy) or hold dogmatic, degenerate beliefs (Level-). We introduce the ``Connected Minds'' model, which unifies these frameworks by integrating iterative reasoning with a parameterized network bias. We posit that agents do not observe the global population; rather, they observe a sample biased by their network position, governed by a locality parameter representing algorithmic ranking, social homophily, or information disclosure. We show that this parameter acts as a continuous bridge: the model collapses to the myopic Level- recursion as networks become opaque () and recovers the standard Cognitive Hierarchy model under full transparency (). Theoretically, we establish that network opacity induces a…
Peer Reviews
No public reviews on file for this paper yet. If you reviewed it on a platform where reviews are public (OpenReview, ICLR, NeurIPS, ICML), you can paste yours below so the community can read it here.
Videos
No videos yet. Explain this paper in a talk, walkthrough, or lecture? Add one.
Taxonomy
TopicsGame Theory and Applications · Opinion Dynamics and Social Influence · Evolutionary Game Theory and Cooperation
