Advanced Search
MyIDEAS: Login

Field Centipedes

Contents:

Author Info

Abstract

We conduct a field experiment in which highly-ranked chess players play the centipede game in a natural setting. This game represents one of the main paradoxes of backward induction. In the experiment two players alternately are faced with the decision of either taking an exponentially growing pile of money and ending the game, or letting the other player make the decision. The player who decides to stop the game takes the larger portion of the pile, and the other player gets the remaining amount. All standard equilibrium concepts dictate that the player who decides first must stop the game immediately. There is vast experimental evidence, however, that this rarely occurs. Contrary to this evidence our results show that 69% of chess players stop the game immediately. When we restrict attention to chess Grandmasters this percentage escalates to 100%. We also conduct standard laboratory experiments where college students and chess players play ten repetitions of the game. We find that chess players playing versus other chess players rapidly converge to the equilibrium outcome, whereas students playing versus other students systematically depart from it. However, when students play against chess players the occurrence of the backward induction outcome increases tenfold.

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://volij.co.il/publications/papers/CENTIPEDE.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Oscar Volij in its series Economic theory and game theory with number 020.

as in new window
Length:
Date of creation:
Date of revision:
Publication status: Forthcoming in the American Economic Review.
Handle: RePEc:nid:ovolij:020

Contact details of provider:
Postal: Oscar Volij, Department of Economics, Ben-Gurion University, Beer-Sheva 84105, Israel
Web page: http://volij.co.il/

Order Information:
Web: http://volij.co.il/addr.html

Related research

Keywords: Rationality; centipede game; experiments; chess players.;

Other versions of this item:

Find related papers by JEL classification:

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. 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.
  2. Asheim,G.B. & Dufwenberg,M., 2000. "Deductive reasoning in extensive games," Memorandum 08/2000, Oslo University, Department of Economics.
  3. 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.
  4. P. Reny, 2010. "Common Belief and the Theory of Games with Perfect Information," Levine's Working Paper Archive 386, David K. Levine.
  5. Johnson, Eric J. & Camerer, Colin & Sen, Sankar & Rymon, Talia, 2002. "Detecting Failures of Backward Induction: Monitoring Information Search in Sequential Bargaining," Journal of Economic Theory, Elsevier, vol. 104(1), pages 16-47, May.
  6. David Kreps & Robert Wilson, 1998. "Sequential Equilibria," Levine's Working Paper Archive 237, David K. Levine.
  7. McKelvey, Richard D & Palfrey, Thomas R, 1992. "An Experimental Study of the Centipede Game," Econometrica, Econometric Society, vol. 60(4), pages 803-36, July.
  8. Rosenthal, Robert W., 1981. "Games of perfect information, predatory pricing and the chain-store paradox," Journal of Economic Theory, Elsevier, vol. 25(1), pages 92-100, August.
  9. Aumann, Robert J., 1995. "Backward induction and common knowledge of rationality," Games and Economic Behavior, Elsevier, vol. 8(1), pages 6-19.
  10. 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.
  11. 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.
  12. Aumann, Robert J., 1998. "On the Centipede Game," Games and Economic Behavior, Elsevier, vol. 23(1), pages 97-105, April.
  13. Binmore, Ken & McCarthy, John & Ponti, Giovanni & Samuelson, Larry & Shaked, Avner, 2002. "A Backward Induction Experiment," Journal of Economic Theory, Elsevier, vol. 104(1), pages 48-88, May.
  14. Philip J. Reny, 1992. "Rationality in Extensive-Form Games," Journal of Economic Perspectives, American Economic Association, vol. 6(4), pages 103-118, Fall.
  15. Zauner, Klaus G., 1999. "A Payoff Uncertainty Explanation of Results in Experimental Centipede Games," Games and Economic Behavior, Elsevier, vol. 26(1), pages 157-185, January.
Full references (including those not matched with items on IDEAS)

Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Never date a game theorist? Lessons from the centipede game
    by Presh Talwalkar in Mind Your Decisions on 2012-07-10 05:01:03
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

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:nid:ovolij:020. 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: (Oscar Volij).

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.