Stated Beliefs and Play in Normal-Form Games

53 Pages Posted: 25 May 2004

See all articles by Miguel A. Costa-Gomes

Miguel A. Costa-Gomes

University of Aberdeen Business School

Georg Weizsacker

Humboldt University Berlin; DIW Berlin

Date Written: July 23, 2007

Abstract

Using data on one-shot games, we investigate whether players' actions can be viewed as responses to underlying expectations about their opponent's behavior. In our laboratory experiments, subjects play a set of 14 two-person 3x3 games, and state beliefs about which actions they expect their opponents to play. The data sets from the two tasks are largely inconsistent. Rather, we find evidence that the subjects perceive the games differently when they (i) choose actions, and (ii) state beliefs - their stated beliefs reveal deeper strategic thinking than their actions. On average, they fail to best respond to their own stated beliefs in almost half of the games. The inconsistency is confirmed by estimates of a unified statistical model that jointly uses the actions and the belief statements. There, we can control for decision noise, and formulate a statistical test that rejects consistency. Effects of the belief elicitation procedure on subsequent actions are mostly insignificant.

Keywords: Noncooperative games, experimental economics, beliefs, bounded rationality

JEL Classification: C72, C92, C51, D84

Suggested Citation

Costa-Gomes, Miguel A. and Weizsacker, Georg, Stated Beliefs and Play in Normal-Form Games (July 23, 2007). Available at SSRN: https://ssrn.com/abstract=549941 or http://dx.doi.org/10.2139/ssrn.549941

Miguel A. Costa-Gomes

University of Aberdeen Business School ( email )

Dunbar Street
Aberdeen, Scotland AB24 3QY
United Kingdom

Georg Weizsacker (Contact Author)

Humboldt University Berlin ( email )

Spandauer Str. 1
Berlin, D-10099
Germany

DIW Berlin

Mohrenstr. 58
Berlin
Germany

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