Boundary and interior equilibria: what drives convergence in a ‘beauty contest’?

Andrea, Morone and Piergiuseppe, Morone (2008): Boundary and interior equilibria: what drives convergence in a ‘beauty contest’?

Abstract

We present an experimental game in the p-beauty framework. Building on the definitions of boundary and interior equilibria, we distinguish between ‘speed of convergence towards the game-theoretic equilibrium’ and ‘deviations of the guesses from the game-theoretic equilibrium’. In contrast to earlier findings (Güth et al., 2002), we show, under a different game parameterisation, that (i) interior equilibria initially produce smaller deviation of the guesses from the game-theoretic equilibrium compared to boundary equilibria; (ii) interior and boundary equilibria do not differ in the timeframe needed for convergence; (iii) the speed of convergence is higher in the boundary equilibrium.

• Item Type: MPRA Paper
• Language: English
• Keywords: Guessing game; p-beauty contest; individual behaviour
• Subjects: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games; C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C91 - Laboratory, Individual Behavior

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