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Field Centipedes

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Author Info

  • Ignacio Palacios-Huerta
  • Oscar Volij

Abstract

In the centipede game, all standard equilibrium concepts dictate that the player who decides first must stop the game immediately. There is vast experimental evidence, however, that this rarely occurs. We first conduct a field experiment in which highly ranked chess players play this game. Contrary to previous evidence, our results show that69 percent of chess players stop immediately. When we restrict attention to Grandmasters, this percentage escalates to 100 percent. We then conduct a laboratory experiment in which chess players and students are matched in different treatments. When students play against chess players, the outcome approaches the subgame-perfect equilibrium. (JEL C72, C93)

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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 99 (2009)
Issue (Month): 4 (September)
Pages: 1619-35

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Handle: RePEc:aea:aecrev:v:99:y:2009:i:4:p:1619-35

Note: DOI: 10.1257/aer.99.4.1619
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References

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  1. McKelvey, Richard D & Palfrey, Thomas R, 1992. "An Experimental Study of the Centipede Game," Econometrica, Econometric Society, vol. 60(4), pages 803-36, July.
  2. David Kreps & Robert Wilson, 1998. "Sequential Equilibria," Levine's Working Paper Archive 237, David K. Levine.
  3. Vincent P. Crawford & Miguel A. Costa-Gomes, 2006. "Cognition and Behavior in Two-Person Guessing Games: An Experimental Study," American Economic Review, American Economic Association, vol. 96(5), pages 1737-1768, December.
  4. Aumann, Robert J., 1998. "On the Centipede Game," Games and Economic Behavior, Elsevier, vol. 23(1), pages 97-105, April.
  5. Geir B. Asheim & Martin Dufwenberg, 2003. "Deductive Reasoning in Extensive Games," Economic Journal, Royal Economic Society, vol. 113(487), pages 305-325, 04.
  6. Binmore, Ken & McCarthy, John & Ponti, Giovanni & Samuelson, Larry & Shaked, Avner, 2002. "A Backward Induction Experiment," Journal of Economic Theory, Elsevier, vol. 104(1), pages 48-88, May.
  7. Reny Philip J., 1993. "Common Belief and the Theory of Games with Perfect Information," Journal of Economic Theory, Elsevier, vol. 59(2), pages 257-274, April.
  8. Johnson, Eric J. & Camerer, Colin & Sen, Sankar & Rymon, Talia, 2002. "Detecting Failures of Backward Induction: Monitoring Information Search in Sequential Bargaining," Journal of Economic Theory, Elsevier, vol. 104(1), pages 16-47, May.
  9. Philip J. Reny, 1992. "Rationality in Extensive-Form Games," Journal of Economic Perspectives, American Economic Association, vol. 6(4), pages 103-118, Fall.
  10. Fey, Mark & McKelvey, Richard D & Palfrey, Thomas R, 1996. "An Experimental Study of Constant-Sum Centipede Games," International Journal of Game Theory, Springer, vol. 25(3), pages 269-87.
  11. Zauner, Klaus G., 1999. "A Payoff Uncertainty Explanation of Results in Experimental Centipede Games," Games and Economic Behavior, Elsevier, vol. 26(1), pages 157-185, January.
  12. Rapoport, Amnon & Stein, William E. & Parco, James E. & Nicholas, Thomas E., 2003. "Equilibrium play and adaptive learning in a three-person centipede game," Games and Economic Behavior, Elsevier, vol. 43(2), pages 239-265, May.
  13. Rosenthal, Robert W., 1981. "Games of perfect information, predatory pricing and the chain-store paradox," Journal of Economic Theory, Elsevier, vol. 25(1), pages 92-100, August.
  14. Gary Bornstein & Tamar Kugler & Anthony Ziegelmeyer, 2002. "Individual and Group Decisions in the Centipede Game: Are Groups More “Rational” Players?," Discussion Paper Series dp298, The Center for the Study of Rationality, Hebrew University, Jerusalem.
  15. Aumann, Robert J., 1995. "Backward induction and common knowledge of rationality," Games and Economic Behavior, Elsevier, vol. 8(1), pages 6-19.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Never date a game theorist? Lessons from the centipede game
    by Presh Talwalkar in Mind Your Decisions on 2012-07-10 05:01:03
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Christoph Bühren & Björn Frank, 2010. "Chess players' performance beyond 64 squares: A case study on the limitations of cognitive abilities transfer," MAGKS Papers on Economics 201019, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  2. Gill, David & Prowse, Victoria, 2012. "Cognitive ability and learning to play equilibrium: A level-k analysis," MPRA Paper 38317, University Library of Munich, Germany, revised 23 Apr 2012.
  3. Stefano DellaVigna, 2009. "Psychology and Economics: Evidence from the Field," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 315-72, June.
  4. Andrea Morone & Piergiuseppe Morone, 2012. "Individual and Group Behaviours in the Traveller's Dilemma: An Experimental Study," Working Papers 2012/09, Economics Department, Universitat Jaume I, Castellón (Spain).
  5. Englmaier, Florian & Gebhardt, Georg, 2010. "Free Riding in the Lab and in the Field," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 344, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  6. Gerdes, Christer & Gränsmark, Patrik, 2010. "Strategic behavior across gender: A comparison of female and male expert chess players," Labour Economics, Elsevier, vol. 17(5), pages 766-775, October.
  7. Steven Levitt & John List & Sally Sadoff, 2010. "Checkmate: Exploring backward induction among chess players," Artefactual Field Experiments 00081, The Field Experiments Website.
  8. Michèle Belot & Raymond Duch & Luis Miller, 2010. "Who should be called to the lab? A comprehensive comparison of students and non-students in classic experimental games," Discussion Papers 2010001, University of Oxford, Nuffield College.
  9. Andreas Ortmann, 2010. "'The Way in Which an Experiment is Conducted is Unbelievably Important': On the Experimentation Practices of Economists and Psychologists," Discussion Papers 2010-06, School of Economics, The University of New South Wales.
  10. Gerdes, Christer & Gränsmark, Patrik & Rosholm, Michael, 2011. "Chicken or Checkin'? Rational Learning in Repeated Chess Games," IZA Discussion Papers 5862, Institute for the Study of Labor (IZA).
  11. Paolo Crosetto & Marco Mantovani, 2012. "Availability of Information and Representation Effects in the Centipede Game," Jena Economic Research Papers 2012-051, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.

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