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The Dirty Faces Game Revisited

Author

Listed:
  • Ralph-C. Bayer

    (School of Economics, University of Adelaide)

  • Mickey Chan

    (School of Economics, University of Adelaide)

Abstract

We compare behavior in Weber's (2001) Dirty Faces Game with that in a modified version. The modifified version is designed to reduce the level of strategic uncertainty by ruling out some equilibria in weakly dominated strategies. We find that in the three-player version of the game reduced strategic uncertainty leads to increased agreement with equilibrium in situations where common knowledge of rationality is required. We conclude that a considerable fraction of deviation from equilibrium is caused by the lack of common knowledge of rationality. We don't find this effect in the two-player version of the game.

Suggested Citation

  • Ralph-C. Bayer & Mickey Chan, 2009. "The Dirty Faces Game Revisited," School of Economics and Public Policy Working Papers 2009-19, University of Adelaide, School of Economics and Public Policy.
    • Handle: RePEc:adl:wpaper:2009-19
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    File URL: https://media.adelaide.edu.au/economics/papers/doc/wp2009-19.pdf
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    Citations

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    Cited by:

    1. Lawrence C. Y. Choo, 2014. "Trading Participation Rights to the “Red Hat Puzzle”. An Experiment," Discussion Papers 1408, University of Exeter, Department of Economics.
    2. Choo, Lawrence & Zhou, Xiaoyu, 2022. "Can market selection reduce anomalous behaviour in games?," European Economic Review, Elsevier, vol. 141(C).
    3. Bayer, Ralph C. & Renou, Ludovic, 2016. "Logical omniscience at the laboratory," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 64(C), pages 41-49.
    4. Choo, Lawrence, 2016. "Market competition for decision rights: An experiment based on the “Hat Puzzle Problem”," MPRA Paper 73408, University Library of Munich, Germany.
    5. Choo, Lawrence & Zhou, Xiaoyu, 2019. "Can market competition reduce anomalous behaviours," FAU Discussion Papers in Economics 08/2019, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    6. Ludovic Renou & Ralph C. Bayer, 2008. "Homo Sapiens Sapiens Meets Homo Strategicus at the Laboratory," Discussion Papers in Economics 08/16, Division of Economics, School of Business, University of Leicester, revised Nov 2008.
    7. Shunqiang Ye & Lu Wang & Kang Hao Cheong & Nenggang Xie, 2017. "Pedestrian Group-Crossing Behavior Modeling and Simulation Based on Multidimensional Dirty Faces Game," Complexity, Hindawi, vol. 2017, pages 1-12, December.
    8. Choo, Lawrence C.Y, 2014. "Trading Participation Rights to the Red Hat Puzzle. Will Markets allocate the rights for performing decision tasks to the more abled players?," MPRA Paper 55569, University Library of Munich, Germany.

    More about this item

    Keywords

    Iterative reasoning; strategic uncertainty; common knowledge of rationality;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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