Title: Games with Noisy Signals About Emotions

Abstract: We study games where utilities may depend on emotions, and we formalize a novel framework allowing for the observation of noisy signals about co-players’ emotions, or states of  mind. Insofar as the latter are belief-dependent, such feedback allows players to draw  inferences informing their strategic thinking. We analyze players’ strategic reasoning adapting the strong rationalizability solution concept, and we give its epistemic justification in terms of players’ rationality and interactive beliefs. The “forward-induction” reasoning entailed by  such solution allows players to make inferences about their co-players’ beliefs, private information, and future, or past and unobserved behavior based on the behavioral and emotional 

feedback they obtain as the game unfolds. We illustrate our framework with a signaling-like example, showing that the possibility of betraying lies, e.g., by blushing, may incentivize
truth-telling.