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Condorcet Jury Theorem and Cognitive Hierarchies: Theory and Experiments

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Abstract

An information aggregation problem of the Condorcet Jury Theorem is considered with cognitive hierarchy models in which players would best respond holding heterogeneous beliefs on cognitive level of the other players. Whether the players are aware of the presence of opponents at their own cognitive level turns out to be a key factor for asymptotic properties of the deviation from the Nash behavior, and thence for asymptotic efficiency of the group decision. Our laboratory experiments provide evidence for the self-awareness condition. We obtain an analytical result showing that the difference from the standard cognitive hierarchy models arises when the best-reply functions are asymptotically expanding.

Suggested Citation

  • Yukio Koriyama & Ali Ihsan Ozkes, 2017. "Condorcet Jury Theorem and Cognitive Hierarchies: Theory and Experiments," AMSE Working Papers 1708, Aix-Marseille School of Economics, France.
  • Handle: RePEc:aim:wpaimx:1708
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    Cited by:

    1. Benjamin Patrick Evans & Mikhail Prokopenko, 2024. "Bounded rationality for relaxing best response and mutual consistency: the quantal hierarchy model of decision making," Theory and Decision, Springer, vol. 96(1), pages 71-111, February.
    2. Benjamin Patrick Evans & Mikhail Prokopenko, 2021. "Bounded rationality for relaxing best response and mutual consistency: The Quantal Hierarchy model of decision-making," Papers 2106.15844, arXiv.org, revised Mar 2023.
    3. Feng, Jun & Qin, Xiangdong & Wang, Xiaoyuan, 2021. "A Bayesian cognitive hierarchy model with fixed reasoning levels," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 704-723.
    4. Shuige Liu, 2024. "Level-$k$ Reasoning, Cognitive Hierarchy, and Rationalizability," Papers 2404.19623, arXiv.org, revised May 2024.
    5. Dan Levin & Luyao Zhang, 2022. "Bridging Level-K to Nash Equilibrium," Papers 2202.12292, arXiv.org, revised Feb 2022.

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    More about this item

    Keywords

    collective decision-making; bounded rationality; cognitive hierarchy; Condorcet Jury Theorem;
    All these keywords.

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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