Heterogeneity in Guessing Games: An Experiment

Liu, Tianwei (2016): Heterogeneity in Guessing Games: An Experiment.

Abstract

In interactions under strategic complementarity, naive players have a disproportionally large effect on the aggregate outcome, resulting in a nonlinear relationship between the proportion of sophisticated and naive players and the aggregate outcome. This paper studies this relationship in a beauty contest game by informing some players the game theoretic solution and systematically varying the proportion of informed players. The results show that the conditions predicted by strategic complementarity stand empirical test.

• Item Type: MPRA Paper
• Language: English
• Keywords: Beauty contest, Strategic complementarity, Beliefs, Bounded rationality
• Subjects: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games; D - Microeconomics > D0 - General > D03 - Behavioral Microeconomics: Underlying Principles; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty

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