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What happens in the field stays in the field: Professionals do not play minimax in laboratory experiments

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  • Steven Levitt
  • John List
  • David Reiley

Abstract

The minimax argument represents game theory in its most elegant form: simple but with stark predictions. Although some of these predictions have been met with reasonable success in the field, experimental data have generally not provided results close to the theoretical predictions. In a striking study, Palacios-Huerta and Volij (2007) present evidence that potentially resolves this puzzle: both amateur and professional soccer players play nearly exact minimax strategies in laboratory experiments. In this paper, we establish important bounds on these results by examining the behavior of four distinct subject pools: college students, bridge professionals, world-class poker players, who have vast experience with high-stakes randomization in card games, and American professional soccer players. In contrast to Palacios-Huerta and Volij’s results, we find little evidence that real-world experience transfers to the lab in these games—indeed, similar to previous experimental results, all four subject pools provide choices that are generally not close to minimax predictions. We use two additional pieces of evidence to explore why professionals do not perform well in the lab: (1) complementary experimental treatments that pit professionals against preprogrammed computers, and (2) post-experiment questionnaires. The most likely explanation is that these professionals are unable to transfer their skills at randomization from the familiar context of the field to the unfamiliar context of the lab.

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File URL: http://karlan.yale.edu/fieldexperiments/papers/00080.pdf
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Bibliographic Info

Paper provided by The Field Experiments Website in its series Artefactual Field Experiments with number 00080.

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Date of creation: 2010
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Handle: RePEc:feb:artefa:00080

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Web page: http://www.fieldexperiments.com

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References

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  1. Glenn Harrison & John List, 2004. "Field experiments," Artefactual Field Experiments 00058, The Field Experiments Website.
  2. P.-A. Chiappori, 2002. "Testing Mixed-Strategy Equilibria When Players Are Heterogeneous: The Case of Penalty Kicks in Soccer," American Economic Review, American Economic Association, vol. 92(4), pages 1138-1151, September.
  3. Mark Walker & John Wooders, 2001. "Minimax Play at Wimbledon," American Economic Review, American Economic Association, vol. 91(5), pages 1521-1538, December.
  4. Loewenstein, George, 1999. "Experimental Economics from the Vantage-Point of Behavioural Economics," Economic Journal, Royal Economic Society, vol. 109(453), pages F23-34, February.
  5. Ignacio Palacios-Huerta, 2003. "Professionals Play Minimax," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 395-415.
  6. Haigh, Michael S. & List, John A., 2002. "Do Professional Traders Exhibit Myopic Loss Aversion? An Experimental Analysis," Working Papers 28554, University of Maryland, Department of Agricultural and Resource Economics.
  7. Robert W. Rosenthal & Jason Shachat & Mark Walker, 2003. "Hide and Seek in Arizona," Experimental 0312001, EconWPA.
  8. Ernst Fehr & John A. List, 2004. "THE HIDDEN COSTS AND RETURNS OF INCENTIVES — TRUST AND TRUSTWORTHINESS AMONG CEOs," Labor and Demography 0409012, EconWPA.
  9. Steven D. Levitt & John A. List, 2007. "What Do Laboratory Experiments Measuring Social Preferences Reveal About the Real World?," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 153-174, Spring.
  10. O'Neill, Barry, 1991. "Comments on Brown and Rosenthal's Reexamination [Testing the Minimax Hypothesis, A Reexamination of O'Neill's Game Experiment]," Econometrica, Econometric Society, vol. 59(2), pages 503-07, March.
  11. Lawrence Friedman, 1971. "Optimal Bluffing Strategies in Poker," Management Science, INFORMS, vol. 17(12), pages B764-B771, August.
  12. Jason Shachat & J. Todd Swarthout, 2004. "Do we detect and exploit mixed strategy play by opponents?," Computational Statistics, Springer, vol. 59(3), pages 359-373, 07.
  13. Glenn W. Harrison & John A. List, 2007. "Naturally Occurring Markets and Exogenous Laboratory Experiments: A Case Study of the Winner's Curse," NBER Working Papers 13072, National Bureau of Economic Research, Inc.
  14. Spiliopoulos, Leonidas, 2008. "Do repeated game players detect patterns in opponents? Revisiting the Nyarko & Schotter belief elicitation experiment," MPRA Paper 6666, University Library of Munich, Germany.
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Cited by:
  1. Timothy N. Cason & Daniel Friedman & Ed Hopkins, 2009. "Testing the TASP: An Experimental Investigation of Learning in Games with Unstable Equilibria," ESE Discussion Papers 188, Edinburgh School of Economics, University of Edinburgh.
  2. Matt Van Essen & John Wooders, 2013. "Blind Stealing: Experience and Expertise in a Mixed-Strategy Poker Experiment," Working Paper Series 6, Economics Discipline Group, UTS Business School, University of Technology, Sydney.

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