Tree Construction and Backward Induction: A Mobile Experiment

58 Pages Posted: 31 May 2018 Last revised: 12 Jan 2019

See all articles by Konrad Grabiszewski

Konrad Grabiszewski

Mohammad bin Salman College

Alex R. Horenstein

University of Miami - School of Business Administration - Department of Economics

Date Written: December 19, 2018

Abstract

Dynamic game theory has two fundamental goals: modeling how decision-makers perceive the interaction they participate in (tree construction) and identifying the strategies they select (backward induction). In our experiment, subjects often violate the theory (i.e., they do not construct a tree or backward induct), which is because either their skills are too low or the interaction is too complex. We use response times to measure skills and complexity. We find that complexity of interaction increases with its length and width; however, the length has a relatively bigger impact. Improving skills or decreasing complexity increases the likelihood of subjects behaving according to the theory; however, improving skills has a bigger impact. To collect the data, we developed a mobile application, Blues and Reds, comprising of 58 dynamic games. Our samples include 4,582 (analysis of tree construction) and 6,677 (analysis of backward induction) subjects coming from over 100 countries.

Keywords: game theory; mobile experiment; tree construction; backward induction

Suggested Citation

Grabiszewski, Konrad and Horenstein, Alex R., Tree Construction and Backward Induction: A Mobile Experiment (December 19, 2018). Available at SSRN: https://ssrn.com/abstract=3181740 or http://dx.doi.org/10.2139/ssrn.3181740

Konrad Grabiszewski

Mohammad bin Salman College ( email )

KAEC
Saudi Arabia

Alex R. Horenstein (Contact Author)

University of Miami - School of Business Administration - Department of Economics ( email )

P.O. Box 248126
Coral Gables, FL 33124-6550
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
23
Abstract Views
303
PlumX Metrics