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Cognitive Hierarchies in the Minimizer Game

Berger, Ulrich and De Silva, Hannelore and Fellner-Röhling, Gerlinde (2016) Cognitive Hierarchies in the Minimizer Game. Department of Economics Working Paper Series, 211. WU Vienna University of Economics and Business, Vienna.

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Experimental tests of choice predictions in one-shot games show only little support for Nash equilibrium (NE). Poisson Cognitive Hierarchy (PCH) and level-k (LK) are behavioral models of the thinking-steps variety where subjects differ in the number of levels of iterated reasoning they perform. Camerer et al. (2004) claim that substituting the Poisson parameter tau = 1.5 yields a parameter-free PCH model (pfPCH) which predicts experimental data considerably better than NE. We design a new multi-person game, the Minimizer Game, as a testbed to compare initial choice predictions of NE, pfPCH and LK. Data obtained from two large-scale online experiments strongly reject NE and LK, but are well in line with the point prediction of pfPCH.

Item Type: Paper
Keywords: behavioral game theory / experimental games / Poisson cognitive hierarchy / level-k model / minimizer game
Classification Codes: JEL C72, C90, D01, D83
Divisions: Departments > Volkswirtschaft
Depositing User: Claudia Tering-Raunig
Date Deposited: 19 Jan 2016 12:50
Last Modified: 29 Jan 2018 10:21
URI: http://epub.wu.ac.at/id/eprint/4805


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