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Level-n Bounded Rationality on a Level Playing Field of Sequential Games

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  • Ernan Haruvy
  • Dale Stahl

Abstract

We report experimental results using a multi-task for simple two-player, two- stage extensive-form games. It is suggested that by creating the perception of a "level playing field" the participants are relieved of responsibility for others since competition on a level playing field is presumed to be fair a priori. Consistent with this suggestion, we find that the vast majority of behavior is individualistic. Moreover, we find that a straightforward extension of the Level-n theory of bounded rationality fits this data remarkably well. We also extend this theory to allow other-regarding preferences, and find that about 15% of the population behaves as if utilitarian and/or spiteful

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Bibliographic Info

Paper provided by Econometric Society in its series Econometric Society 2004 North American Winter Meetings with number 126.

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Date of creation: 11 Aug 2004
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Handle: RePEc:ecm:nawm04:126

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Keywords: Bounded rationality; sequential games;

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