From the Luce Choice Axiom to the Quantal Response Equilibrium

The Luce Choice Axiom, which has led to advances in several areas, currently is being used to explain subject behavior from experimental game theory. Our critical analysis of one such approach, called the Quantal Response Equilibrium, uses a new way to uniquely decompose games into the portion that encourages individuals to seek personally preferred payoffs and the portion that requires cooperation among players. An open problem concerning how to model the actual behavior of players is described.