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Playing the wrong game: An experimental analysis of relational complexity and strategic misrepresentation

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  • Devetag, Giovanna
  • Warglien, Massimo

Abstract

It has been suggested that players often produce simplified and/or misspecified mental models of strategic decisions [Kreps, D., 1990. Game Theory and Economic Modeling. Oxford Univ. Press, Oxford]. We submit that the relational structure of players' preferences in a game is a source of cognitive complexity, and may be an important driver of such simplifications. We provide a classification of order structures in two-person games based on the properties of monotonicity and projectivity, and present experiments in which subjects construct representations of games of different relational complexity and subsequently play the games according to these representations. Experimental results suggest that relational complexity matters. More complex games are harder to represent, and this difficulty seems correlated with short term memory capacity. In addition, most erroneous representations are simpler than the correct ones. Finally, subjects who misrepresent the games behave consistently with such representations, suggesting that in many strategic settings individuals may act optimally on the ground of simplified and mistaken premises.

Suggested Citation

  • Devetag, Giovanna & Warglien, Massimo, 2008. "Playing the wrong game: An experimental analysis of relational complexity and strategic misrepresentation," Games and Economic Behavior, Elsevier, vol. 62(2), pages 364-382, March.
  • Handle: RePEc:eee:gamebe:v:62:y:2008:i:2:p:364-382
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    6. Costa-Gomes, Miguel & Crawford, Vincent P & Broseta, Bruno, 2001. "Cognition and Behavior in Normal-Form Games: An Experimental Study," Econometrica, Econometric Society, vol. 69(5), pages 1193-1235, September.
    7. Pillutla, Madan M. & Chen, Xiao-Ping, 1999. "Social Norms and Cooperation in Social Dilemmas: The Effects of Context and Feedback, , ," Organizational Behavior and Human Decision Processes, Elsevier, vol. 78(2), pages 81-103, May.
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    Citations

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    Cited by:

    1. Giovanna Devetag & Andreas Ortmann, 2007. "When and why? A critical survey on coordination failure in the laboratory," Experimental Economics, Springer;Economic Science Association, vol. 10(3), pages 331-344, September.
    2. Andreas Nicklisch, 2006. "Perceiving strategic environments: An experimental study of learning under minimal information," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2006_17, Max Planck Institute for Research on Collective Goods.
    3. Sibilla Di Guida & Giovanna Devetag, 2013. "Feature-Based Choice and Similarity Perception in Normal-Form Games: An Experimental Study," Games, MDPI, Open Access Journal, vol. 4(4), pages 1-19, December.
    4. Massimo Warglien, 2013. "Language and economic organization," Chapters,in: Handbook of Economic Organization, chapter 8 Edward Elgar Publishing.
    5. Giovanna Devetag & Sibilla Di Guida, 2010. "Feature-based Choice and Similarity in Normal-form Games: An Experimental Study," LEM Papers Series 2010/18, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    6. Giovanna Devetag & Sibilla Guida & Luca Polonio, 2016. "An eye-tracking study of feature-based choice in one-shot games," Experimental Economics, Springer;Economic Science Association, vol. 19(1), pages 177-201, March.
    7. Rydval, Ondrej & Ortmann, Andreas & Ostatnicky, Michal, 2009. "Three very simple games and what it takes to solve them," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 589-601, October.
    8. Huck, Steffen & Jehiel, Philippe & Rutter, Tom, 2011. "Feedback spillover and analogy-based expectations: A multi-game experiment," Games and Economic Behavior, Elsevier, vol. 71(2), pages 351-365, March.
    9. Tsuyoshi Hatori & Hayeong Jeong & Kiyoshi Kobayashi, 2014. "Regional learning and trust formation," Chapters,in: Knowledge, Innovation and Space, chapter 8, pages 180-212 Edward Elgar Publishing.
    10. Page, Lionel & Page, Katie, 2010. "Last shall be first: A field study of biases in sequential performance evaluation on the Idol series," Journal of Economic Behavior & Organization, Elsevier, vol. 73(2), pages 186-198, February.
    11. repec:gam:jgames:v:8:y:2017:i:3:p:33-:d:107453 is not listed on IDEAS
    12. Andreas Nicklisch, 2011. "Learning strategic environments: an experimental study of strategy formation and transfer," Theory and Decision, Springer, vol. 71(4), pages 539-558, October.
    13. Rodrigo Moro & Esteban Freidin & Fernando Tohmé, 2015. "Social preferences are not enough: Accounting for anomalous behavior in a complex mixed-motive game," REVISTA CUADERNOS DE ECONOMÍA, UN - RCE - CID, March.

    More about this item

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles

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