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Beliefs and endogenous cognitive levels: An experimental study

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  • Agranov, Marina
  • Potamites, Elizabeth
  • Schotter, Andrew
  • Tergiman, Chloe

Abstract

In this paper we use a laboratory setting to manipulate our subjectsʼ beliefs about the cognitive levels of the players they are playing against. We show that in the context of the 2/3 guessing game, individual choices crucially depend on their beliefs about the level of others. Hence, a subjectʼs true cognitive level may be different than the one he exhibits in a game with the difference being attributed to his expectations about the sophistication of the players he is playing against.

Suggested Citation

  • Agranov, Marina & Potamites, Elizabeth & Schotter, Andrew & Tergiman, Chloe, 2012. "Beliefs and endogenous cognitive levels: An experimental study," Games and Economic Behavior, Elsevier, vol. 75(2), pages 449-463.
    • Handle: RePEc:eee:gamebe:v:75:y:2012:i:2:p:449-463
    DOI: 10.1016/j.geb.2012.02.002
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    More about this item

    Keywords

    Guessing game; Beliefs; Level-k theory;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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