If You Could Read My Mind—An Experimental Beauty-Contest Game with Children

59 Pages Posted: 12 Dec 2019 Last revised: 19 Mar 2021

See all articles by Henning Hermes

Henning Hermes

Heinrich Heine University Dusseldorf - Duesseldorf Institute for Competition Economics (DICE); FAIR Excellence Cluster, NHH Bergen; CESifo (Center for Economic Studies and Ifo Institute); IZA; Centre for Economic Policy Research (CEPR)

Daniel Schunk

Johannes Gutenberg University Mainz - Department of Economics

Date Written: March 16, 2021

Abstract

We develop a new design for the experimental beauty-contest game (BCG) that is suitable for children in school age and test it with 114 schoolchildren aged 9-11 years as well as with adults. In addition, we collect a measure for cognitive skills to link these abilities with successful performance in the game. Results demonstrate that children can successfully understand and play a BCG. Choices start at a slightly higher level than those of adults but learning over time and depth of reasoning are largely comparable with the results of studies run with adults. Cognitive skills, measured as fluid IQ, are predictive only of whether children choose weakly dominated strategies but are neither associated with lower choices in the first round nor with successful performance in the BCG. In the implementation of our new design of the BCG with adults we find results largely in line with behavior in the classical BCG. Our new design for the experimental BCG allows to study the development of strategic interaction skills starting already in school age.

Keywords: children, experimental beauty-contest game, guessing game, strategic interac- tion, decision-making, cognitive skills, noncognitive skills

JEL Classification: C72, C92

Suggested Citation

Hermes, Henning and Schunk, Daniel, If You Could Read My Mind—An Experimental Beauty-Contest Game with Children (March 16, 2021). NHH Dept. of Economics Discussion Paper No. 23/2019, Available at SSRN: https://ssrn.com/abstract=3502713 or http://dx.doi.org/10.2139/ssrn.3502713

Henning Hermes (Contact Author)

Heinrich Heine University Dusseldorf - Duesseldorf Institute for Competition Economics (DICE) ( email )

Universitaetsstr. 1
Duesseldorf, NRW 40225
Germany

FAIR Excellence Cluster, NHH Bergen ( email )

Helleveien 30
Bergen, NO-5045
Norway

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

IZA ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Daniel Schunk

Johannes Gutenberg University Mainz - Department of Economics ( email )

Germany

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