Understanding Dynamic Interactions

51 Pages Posted: 13 Aug 2019 Last revised: 29 Aug 2023

See all articles by Konrad Grabiszewski

Konrad Grabiszewski

HEC Paris in Qatar

Alex R. Horenstein

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

Date Written: January 1, 2021


Dealing with a problem is a two-step process consisting of understanding followed by solving. This article delves into the study of understanding within the context of dynamic interactions. We introduce the same backward-induction problem using two distinct representations. The first one resembles a standard game-theoretic tree. In the second one, subjects are not given direct connections between the nodes but receive all necessary information to construct a tree. Our study consists of 27 different interactions, each treated as a separate experiment, and involves 4,788 subjects. Two significant outcomes emerge. First, the process of understanding proves to be a formidable challenge. Second, within the scope of our experiment, understanding appears to be more difficult than solving.

Keywords: understanding, tree construction, solving, backward induction, finite dynamic games, mobile experiment

JEL Classification: C72, C99, D91

Suggested Citation

Grabiszewski, Konrad and Horenstein, Alex R., Understanding Dynamic Interactions (January 1, 2021). University of Miami Business School Research Paper No. 3435573, Available at SSRN: https://ssrn.com/abstract=3435573 or http://dx.doi.org/10.2139/ssrn.3435573

Konrad Grabiszewski

HEC Paris in Qatar ( email )


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

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