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

55 Pages Posted: 12 Dec 2019

See all articles by Henning Hermes

Henning Hermes

NHH Bergen (FAIR / Department of Economics); Johannes Gutenberg University of Mainz

Daniel Schunk

Johannes Gutenberg University Mainz - Department of Economics

Date Written: November 30, 2019

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. In addition, we collect measures on cognitive skills and perspective-taking abilities to identify determinants of 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 are predictive only of whether children choose weakly dominated strategies, whereas measures of perspective-taking abilities are strongly linked to successful performance in the BCG. These findings emphasize the importance of perspective-taking abilities for strategic interaction and economic decision-making. Our new design for the experimental BCG allows further study of the development of strategic interaction skills starting already in school age.

Keywords: children, experimental beauty-contest game, guessing game, strategic interaction, decision-making, perspective-taking, theory of mind, empathy, 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 (November 30, 2019). 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)

NHH Bergen (FAIR / Department of Economics) ( email )

Helleveien 30
Bergen, NO-5045
Norway

Johannes Gutenberg University of Mainz ( email )

Germany

Daniel Schunk

Johannes Gutenberg University Mainz - Department of Economics ( email )

Germany

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