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Anchored strategic reasoning

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  • Ivanova-Stenzel, Radosveta
  • Seres, Gyula

Abstract

We propose a model whereby players’ beliefs about the opponents’ reasoning are anchored to an irrelevant number. The model predicts that strategies are adjusted toward the anchor if they are complements. If strategies are substitutes, adjustments away are also possible.

Suggested Citation

  • Ivanova-Stenzel, Radosveta & Seres, Gyula, 2022. "Anchored strategic reasoning," Economics Letters, Elsevier, vol. 212(C).
    • Handle: RePEc:eee:ecolet:v:212:y:2022:i:c:s0165176522000349
    DOI: 10.1016/j.econlet.2022.110330
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    Cited by:

    1. Yigit Oezcelik & Michel Tolksdorf, 2023. "Non-numerical and social anchoring in consumer-generated ratings," Working Papers 202319, University of Liverpool, Department of Economics.

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    More about this item

    Keywords

    Anchoring bias; Auctions; Games; Incomplete information; Strategy;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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