Andrea, Morone and Piergiuseppe, Morone (2008): Boundary and interior equilibria: what drives convergence in a ‘beauty contest’?
Download (88kB) | Preview
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|
|Original Title:||Boundary and interior equilibria: what drives convergence in a ‘beauty contest’?|
|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
|Depositing User:||Andrea Morone|
|Date Deposited:||16. Jul 2008 00:45|
|Last Modified:||16. Feb 2013 16:06|
Bosch-Domènech A., Montalvo J.G., Nagel R., Satorra A.: (2002). One, Two, (Three), Infinity, ...: Newspaper and Lab Beauty-Contest Experiments. The American Economic Review, 92(5):1687-1701. Camerer, C., Ho, T. H., and Weigelt, K.: (1998). Iterated dominance and iterated best response in experimental “p-beauty contest”. The American Economic Review, 88(4):947-969. Duffy, J., and Nagel, R.: (1997). On the robusness of behaviour in experimental “beauty contest’ games. The Economic Journal, 107(445):1684-1700. Keynes, J. M. (1936). The general theory of interest, employment and money. London: Macmillan. Fischbacher, U. (2007), “Zurich toolbox for readymade economic experiments”, Experimental Economics, 10, 171–178. Güth, W., Kocher, M., and Sutter, M.: (2002). Experimental ‘beauty contest’ with homogeneous and heterogeneous players and with interior and boundary equilibria. Economic Letters, 74:219-228. Morone, A. and Morone, P. (2008). “Guessing game and people behaviours: What can we learn?”. In M. Abdellaboui and J. D. Hey (Ed.), “Advances in Decision Making under Risk and Uncertainty” Springer. Nagel, R.: (1995). Unraveling in guessing games: an experimental study. The American Economic Review, 85(5):1313-1326. Rubinstein, A., Tversky, A., Heller, D., 1997. Naive strategies in competitive games. In: Albers, W. et al. (Ed.), Understanding Strategic Interaction: Essays in Honor of Reinhard Selten. Springer, Heidelberg, pp. 394–402. Weber, R., A.: (2003). Learning with no feedback in a competitive guessing game. Games and Economic Behavior, 44:134-144.