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Strategic reasoning in p-beauty contests

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  • Breitmoser, Yves

Abstract

This paper analyzes strategic choice in p-beauty contests. First, I show that it is not generally a best reply to guess the expected target value, even in games with n>2 players, and that iterated best response strictly applied does not induce a choice sequence approximating pk⋅0.5. Second, I argue that the beliefs and actions of players typically considered to be level 2–4 are intuitively captured also by high-level concepts such as quantal response equilibrium and noisy introspection. Third, I analyze this hypothesis econometrically. The results concur. In six different data sets, the choices are described more adequately as mixtures of quantal response equilibrium and noisy introspection than as level-k mixtures.

Suggested Citation

  • Breitmoser, Yves, 2012. "Strategic reasoning in p-beauty contests," Games and Economic Behavior, Elsevier, vol. 75(2), pages 555-569.
  • Handle: RePEc:eee:gamebe:v:75:y:2012:i:2:p:555-569
    DOI: 10.1016/j.geb.2012.02.010
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Burchardi, Konrad B. & Penczynski, Stefan P., 2014. "Out of your mind: Eliciting individual reasoning in one shot games," Games and Economic Behavior, Elsevier, vol. 84(C), pages 39-57.
    2. repec:eee:gamebe:v:106:y:2017:i:c:p:16-37 is not listed on IDEAS
    3. Nobuyuki Hanaki & Angela Sutan & Marc Willinger, 2016. "The Strategic Environment Effect in Beauty Contest Games," GREDEG Working Papers 2016-05, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
    4. repec:eee:matsoc:v:90:y:2017:i:c:p:191-207 is not listed on IDEAS
    5. Yukio Koriyama & Ali Ozkes, 2017. "Condorcet Jury Theorem and Cognitive Hierarchies: Theory and Experiments," Working Papers halshs-01485748, HAL.
    6. Yves Breitmoser, 2015. "Cooperation, but No Reciprocity: Individual Strategies in the Repeated Prisoner's Dilemma," American Economic Review, American Economic Association, vol. 105(9), pages 2882-2910, September.
    7. Marcus Dittrich & Kristina Leipold, 2014. "Gender Differences in Strategic Reasoning," CESifo Working Paper Series 4763, CESifo Group Munich.
    8. Mariano Runco, 2013. "Estimating depth of reasoning in a repeated guessing game with no feedback," Experimental Economics, Springer;Economic Science Association, vol. 16(3), pages 402-413, September.
    9. Breitmoser, Yves, 2015. "Knowing me, imagining you: Projection and overbidding in auctions," MPRA Paper 62052, University Library of Munich, Germany.
    10. Nagel, Rosemarie & Bühren, Christoph & Frank, Björn, 2017. "Inspired and inspiring: Hervé Moulin and the discovery of the beauty contest game," Mathematical Social Sciences, Elsevier, vol. 90(C), pages 191-207.
    11. Breitmoser, Yves, 2017. "Knowing Me, Imagining You:," Rationality and Competition Discussion Paper Series 36, CRC TRR 190 Rationality and Competition.
    12. Bolle, Friedel, 2017. "Passing the Buck On the acceptance of responsibility," Research in Economics, Elsevier, vol. 71(1), pages 86-101.

    More about this item

    Keywords

    Beauty contest; Logit equilibrium; Noisy introspection; Level-k;

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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