Advanced Search
MyIDEAS: Login to save this paper or follow this series

Social Centipedes: the Impact of Group Identity on Preferences and Reasoning

Contents:

Author Info

  • Le Coq, Chloe

    ()
    (Stockholm Institute of Transition Economics)

  • Tremewan, James

    ()
    (Department of Economics, University of Vienna (Austria))

  • Wagner, Alexander K.

    ()
    (Department of Economics, University of Cologne (Germany))

Abstract

Using a group identity manipulation we examine the role of social preferences in an experimental one-shot centipede game. Contrary to what social preference theory would predict, we find that players continue longer when playing with outgroup members. Our explanation rests on two observations: (i) players should only stop if they are sufficiently confident that their partner will stop at the next node, given the exponentially-increasing payoffs in the game, and (ii) players are more likely to have this degree of certainty if they are matched with someone from the same group, whom they view as similar to themselves and thus predictable. We find strong statistical support for this argument. We conclude that group identity not only impacts a player’s utility function, as identified in earlier research, but also affects her reasoning about the partner’s behavior.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://swopec.hhs.se/hasite/papers/hasite0024.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Stockholm Institute of Transition Economics, Stockholm School of Economics in its series SITE Working Paper Series with number 24.

as in new window
Length: 33 pages
Date of creation: 30 Sep 2013
Date of revision:
Handle: RePEc:hhs:hasite:0024

Contact details of provider:
Postal: Stockholm Institute of Transition Economics, Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden
Phone: (+46 8) 736 9670
Fax: (+46 8) 31 64 22
Web page: http://www.hhs.se/site/
More information through EDIRC

Related research

Keywords: Group identity; centipede game; prospective reference theory;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. repec:feb:artefa:0097 is not listed on IDEAS
  2. Blanco, Mariana & Engelmann, Dirk & Koch, Alexander K. & Normann, Hans-Theo, 2014. "Preferences and beliefs in a sequential social dilemma: A within-subjects analysis," DICE Discussion Papers 145, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  3. Roy Chen & Yan Chen, 2011. "The Potential of Social Identity for Equilibrium Selection," American Economic Review, American Economic Association, vol. 101(6), pages 2562-89, October.
  4. Jacob K. Goeree & Charles A. Holt, 2000. "A Model of Noisy Introspection," Virginia Economics Online Papers 343, University of Virginia, Department of Economics.
  5. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences With Simple Tests," The Quarterly Journal of Economics, MIT Press, vol. 117(3), pages 817-869, August.
  6. Jordi Brandts & Gary Charness, 2011. "The strategy versus the direct-response method: a first survey of experimental comparisons," Experimental Economics, Springer, vol. 14(3), pages 375-398, September.
  7. Dale O. Stahl & Paul W. Wilson, 2010. "On Players' Models of Other Players: Theory and Experimental Evidence," Levine's Working Paper Archive 542, David K. Levine.
  8. Costa-Gomes, Miguel A. & Crawford, Vincent P., 2004. "Cognition and Behavior in Two-Person Guessing Games: An Experimental Study," University of California at San Diego, Economics Working Paper Series qt449812fx, Department of Economics, UC San Diego.
  9. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
  10. Yan Chen & Sherry Xin Li, 2009. "Group Identity and Social Preferences," American Economic Review, American Economic Association, vol. 99(1), pages 431-57, March.
  11. 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.
  12. Engelmann, Dirk & Strobel, Martin, 2012. "Deconstruction and reconstruction of an anomaly," Games and Economic Behavior, Elsevier, vol. 76(2), pages 678-689.
  13. Steven Levitt & John List & Sally Sadoff, 2010. "Checkmate: Exploring backward induction among chess players," Artefactual Field Experiments 00081, The Field Experiments Website.
  14. Aumann, Robert J., 1995. "Backward induction and common knowledge of rationality," Games and Economic Behavior, Elsevier, vol. 8(1), pages 6-19.
  15. W. Viscusi & William Evans, 2006. "Behavioral Probabilities," Journal of Risk and Uncertainty, Springer, vol. 32(1), pages 5-15, January.
  16. Fehr, Ernst & Schmidt, Klaus M., 1999. "A theory of fairness, competition, and cooperation," Munich Reprints in Economics 20650, University of Munich, Department of Economics.
  17. Stahl, Dale II & Wilson, Paul W., 1994. "Experimental evidence on players' models of other players," Journal of Economic Behavior & Organization, Elsevier, vol. 25(3), pages 309-327, December.
  18. McKelvey, Richard D & Palfrey, Thomas R, 1992. "An Experimental Study of the Centipede Game," Econometrica, Econometric Society, vol. 60(4), pages 803-36, July.
  19. Terrance Hurley & Jason Shogren, 2005. "An Experimental Comparison of Induced and Elicited Beliefs," Journal of Risk and Uncertainty, Springer, vol. 30(2), pages 169-188, January.
  20. Richard Mckelvey & Thomas Palfrey, 1998. "Quantal Response Equilibria for Extensive Form Games," Experimental Economics, Springer, vol. 1(1), pages 9-41, June.
  21. 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.
  22. Rutström, E. Elisabet & Wilcox, Nathaniel T., 2009. "Stated beliefs versus inferred beliefs: A methodological inquiry and experimental test," Games and Economic Behavior, Elsevier, vol. 67(2), pages 616-632, November.
  23. Marina Agranov & Elizabeth Potamites & rew Schotter & Chloe Tergiman, 2012. "Beliefs and Endogenous Cognitive Levels: An Experimental Study," Mathematica Policy Research Reports 7497, Mathematica Policy Research.
  24. 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.
  25. Viscusi, W Kip, 1989. " Prospective Reference Theory: Toward an Explanation of the Paradoxes," Journal of Risk and Uncertainty, Springer, vol. 2(3), pages 235-63, September.
  26. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
  27. Nagel, Rosemarie, 1995. "Unraveling in Guessing Games: An Experimental Study," American Economic Review, American Economic Association, vol. 85(5), pages 1313-26, December.
  28. Aumann, Robert J., 1998. "On the Centipede Game," Games and Economic Behavior, Elsevier, vol. 23(1), pages 97-105, April.
  29. Gerber, Anke & Wichardt, Philipp C., 2010. "Iterated reasoning and welfare-enhancing instruments in the centipede game," Journal of Economic Behavior & Organization, Elsevier, vol. 74(1-2), pages 123-136, May.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:hhs:hasite:0024. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Evelina Bonnier).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.