Beliefs and Endogenous Cognitive Levels: An Experimental Study
California Institute of Technology
affiliation not provided to SSRN
New York University (NYU) - Department of Economics
University of British Columbia - Sauder School of Business
January 1, 2012
Games and Economic Behavior, Forthcoming
In this paper we use a laboratory setting to manipulate our subjects’ beliefs about the cognitive levels of the players they are playing against. We show that in the context of the 2/3 guessing game, individual choices crucially depend on their beliefs about the level of others. Hence, a subject’s true cognitive level may be different than the one he exhibits in a game with the difference being attributed to his expectations about the sophistication of the players he is playing against.
Number of Pages in PDF File: 31
Keywords: Guessing Game, Beliefs, Level-k theory
JEL Classification: C72, C92, D83Accepted Paper Series
Date posted: April 18, 2012
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