Hot Vs. Cold: Sequential Responses and Preference Stability in Experimental Games
In experiments with two-person sequential games we analyze whether responses to favorable and unfavorable actions depend on the elicitation procedure. In our "hot" treatment the second player responds to the first player's observed action while in our "cold" treatment we follow the "strategy method" and have the second player decide on a contingent action for each and every possible fist player move, without first observing this move. Our analysis centers on the degree to which subjects deviate from the maximization of their pecuniary rewards, as a response to other's actions.
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