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Finite mixture analysis of beauty-contest data from multiple samples

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  • Antoni Bosch-Domenech
  • Jose Garcia-Montalvo
  • Rosemarie Nagel
  • Albert Satorra

Abstract

This paper develops a finite mixture distribution analysis of Beauty-Contest data obtained from diverse groups of experiments. ML estimation using the EM approach provides estimates for the means and variances of the component distributions, which are common to all the groups, and estimates of the mixing proportions, which are specific to each group. This estimation is performed without imposing constraints on the parameters of the composing distributions. The statistical analysis indicates that many individuals follow a common pattern of reasoning described as iterated best reply (degenerate), and shows that the proportions of people thinking at different levels of depth vary across groups.

Suggested Citation

  • Antoni Bosch-Domenech & Jose Garcia-Montalvo & Rosemarie Nagel & Albert Satorra, 2004. "Finite mixture analysis of beauty-contest data from multiple samples," Artefactual Field Experiments 00013, The Field Experiments Website.
  • Handle: RePEc:feb:artefa:00013
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    References listed on IDEAS

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    1. Nagel, Rosemarie, 1995. "Unraveling in Guessing Games: An Experimental Study," American Economic Review, American Economic Association, vol. 85(5), pages 1313-1326, December.
    2. Ho, Teck-Hua & Camerer, Colin & Weigelt, Keith, 1998. "Iterated Dominance and Iterated Best Response in Experimental "p-Beauty Contests."," American Economic Review, American Economic Association, vol. 88(4), pages 947-969, September.
    3. Colin Camerer & Teck-Hua Ho & Juin Kuan Chong, 2003. "A cognitive hierarchy theory of one-shot games: Some preliminary results," Levine's Bibliography 506439000000000495, UCLA Department of Economics.
    4. Hamparsum Bozdogan, 1987. "Model selection and Akaike's Information Criterion (AIC): The general theory and its analytical extensions," Psychometrika, Springer;The Psychometric Society, vol. 52(3), pages 345-370, September.
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    Cited by:

    1. Wengström, Erik, 2007. "Setting the Anchor: Price Competition, Level-n Theory and Communication," Working Papers 2007:6, Lund University, Department of Economics.

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