35 Pages Posted: 4 Mar 2004
Date Written: June 8, 2007
We present a model for the alpha-beauty contest that explains common patterns in experimental data of one-shot and iterative games. The approach is based on two basic assumptions. First, players iteratively update their recent guesses. Second, players estimate intervals rather than exact numbers to cope with incomplete knowledge of other players' choices. Under these assumptions we extend the cognitive hierarchy model of Camerer, Ho, and Chong (2003). The extended model is estimated on experimental data from a newspaper experiment.
Keywords: Experiments, alpha-beauty contest, beliefs
JEL Classification: C91, D84
Suggested Citation: Suggested Citation
De Giorgi, Enrico G. and Reimann, Stefan, The Alpha-Beauty Contest: Choosing Numbers, Thinking Intervals (June 8, 2007). Available at SSRN: https://ssrn.com/abstract=512242 or http://dx.doi.org/10.2139/ssrn.512242