A mobile experiment on tree construction

45 Pages Posted: 13 Aug 2019 Last revised: 26 May 2020

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: May 24, 2020

Abstract

While a game-theoretic tree is an unrivaled way of representing dynamic interactions, no real-life interaction comes with its tree representation. Before backward inducting, players must construct a tree. We test whether people correctly construct trees. Replicated in 27 different settings with 5,001 subjects from 133 countries, the test shows that between 13% and 63% of subjects fail at tree construction. Our result is detrimental to the internal validity of testing backward induction. We also argue that tree construction is more challenging than backward induction. Data comes from Blues and Reds, a mobile app that functions as an experiment.

Keywords: dynamic games, tree construction, backward induction, experimental game theory, mobile experiment

JEL Classification: C72, C99, D91

Suggested Citation

Grabiszewski, Konrad and Horenstein, Alex R., A mobile experiment on tree construction (May 24, 2020). 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

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

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