Cognitive Hierarchies in the Minimizer Game

Berger, Ulrich and De Silva, Hannelore and Fellner-Röhling, Gerlinde (2016) Cognitive Hierarchies in the Minimizer Game. Journal of Economic Behavior and Organization, 130. pp. 337-348. ISSN 0167-2681

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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 thinkingsteps variety where subjects differ in the number of levels of iterated reasoning they perform. Camerer et al. (2004) claim that substituting the Poisson parameter = 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: Article
Additional Information: To see the final version of this paper please visit the publisher's website. Access to the published version requires a subscription.
Keywords: behavioral game theory, experimental games, Poisson cognitive hierarchy, level-k model, minimizer game
Classification Codes: JEL C72, C90, D01, D83
Divisions: Departments > Volkswirtschaft > Analytische Volkswirtschaftslehre
Departments > Volkswirtschaft > Volkswirtschaftspolitik u Industrieökon.
Version of the Document: Accepted for Publication
Depositing User: Ulrich Berger
Date Deposited: 12 Jun 2017 15:53
Last Modified: 20 Aug 2019 01:31
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