IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-01885390.html
   My bibliography  Save this paper

Representation effects in the centipede game

Author

Listed:
  • Paolo Crosetto

    (GAEL - Laboratoire d'Economie Appliquée de Grenoble - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UGA [2016-2019] - Université Grenoble Alpes [2016-2019])

  • Marco Mantovani

    (UNIMIB - Università degli Studi di Milano-Bicocca [Milano])

Abstract

We explore the effects on strategic behavior of alternative representations of a centipede game that differ in terms of complexity. In a laboratory experiment, we manipulate the way in which payoffs are presented to subjects in two different ways. In both cases, information is made less accessible relative to the standard representation of the game. Results show that these manipulations shift the distribution of take nodes further away from the equilibrium prediction. The evidence is consistent with the view that failures of game-form recognition and the resulting limits to strategic reasoning are crucial for explaining non-equilibrium behavior in the centipede game.

Suggested Citation

  • Paolo Crosetto & Marco Mantovani, 2018. "Representation effects in the centipede game," Post-Print hal-01885390, HAL.
  • Handle: RePEc:hal:journl:hal-01885390
    DOI: 10.1371/journal.pone.0204422
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01885390
    as

    Download full text from publisher

    File URL: https://hal.archives-ouvertes.fr/hal-01885390/document
    Download Restriction: no

    File URL: https://libkey.io/10.1371/journal.pone.0204422?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ponti, Giovanni, 2000. "Cycles of Learning in the Centipede Game," Games and Economic Behavior, Elsevier, vol. 30(1), pages 115-141, January.
    2. Zauner, Klaus G., 1999. "A Payoff Uncertainty Explanation of Results in Experimental Centipede Games," Games and Economic Behavior, Elsevier, vol. 26(1), pages 157-185, January.
    3. Richard Mckelvey & Thomas Palfrey, 1998. "Quantal Response Equilibria for Extensive Form Games," Experimental Economics, Springer;Economic Science Association, vol. 1(1), pages 9-41, June.
    4. McKelvey, Richard D & Palfrey, Thomas R, 1992. "An Experimental Study of the Centipede Game," Econometrica, Econometric Society, vol. 60(4), pages 803-836, July.
    5. Dufwenberg, Martin & Kirchsteiger, Georg, 2004. "A theory of sequential reciprocity," Games and Economic Behavior, Elsevier, vol. 47(2), pages 268-298, May.
    6. Ignacio Palacios-Huerta & Oscar Volij, 2009. "Field Centipedes," American Economic Review, American Economic Association, vol. 99(4), pages 1619-1635, September.
    7. Rapoport, Amnon & Stein, William E. & Parco, James E. & Nicholas, Thomas E., 2003. "Equilibrium play and adaptive learning in a three-person centipede game," Games and Economic Behavior, Elsevier, vol. 43(2), pages 239-265, May.
    8. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    9. Kreps, David M., 1990. "Game Theory and Economic Modelling," OUP Catalogue, Oxford University Press, number 9780198283812.
    10. Steven D. Levitt & John A. List & Sally E. Sadoff, 2011. "Checkmate: Exploring Backward Induction among Chess Players," American Economic Review, American Economic Association, vol. 101(2), pages 975-990, April.
    11. Devetag, Giovanna & Warglien, Massimo, 2003. "Games and phone numbers: Do short-term memory bounds affect strategic behavior?," Journal of Economic Psychology, Elsevier, vol. 24(2), pages 189-202, April.
    12. Astrid Gamba & Tobias Regner, 2015. "Preferences-dependent learning in the Centipede game," Jena Economic Research Papers 2015-012, Friedrich-Schiller-University Jena.
    13. Eichberger, Jürgen & Grant, Simon & Kelsey, David, 2017. "Ambiguity and the Centipede Game: Strategic Uncertainty in Multi-Stage Games," Working Papers 0638, University of Heidelberg, Department of Economics.
    14. Rosenthal, Robert W., 1981. "Games of perfect information, predatory pricing and the chain-store paradox," Journal of Economic Theory, Elsevier, vol. 25(1), pages 92-100, August.
    15. James C. Cox & Duncan James, 2012. "Clocks and Trees: Isomorphic Dutch Auctions and Centipede Games," Econometrica, Econometric Society, vol. 80(2), pages 883-903, March.
    16. Kawagoe, Toshiji & Takizawa, Hirokazu, 2012. "Level-k analysis of experimental centipede games," Journal of Economic Behavior & Organization, Elsevier, vol. 82(2), pages 548-566.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Neligh, Nathaniel, 2020. "Vying for dominance: An experiment in dynamic network formation," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 719-739.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. García-Pola, Bernardo & Iriberri, Nagore & Kovářík, Jaromír, 2020. "Non-equilibrium play in centipede games," Games and Economic Behavior, Elsevier, vol. 120(C), pages 391-433.
    2. Paolo Crosetto & Marco Mantovani, 2012. "Availability of Information and Representation Effects in the Centipede Game," Jena Economic Research Papers 2012-051, Friedrich-Schiller-University Jena.
    3. Spenkuch, Jörg, 2014. "Backward Induction in the Wild: Evidence from the U.S. Senate," MPRA Paper 58766, University Library of Munich, Germany.
    4. Yun Wang, 2015. "Belief and Higher-Order Belief in the Centipede Games: Theory and Experiment," Working Papers 2015-03-24, Wang Yanan Institute for Studies in Economics (WISE), Xiamen University.
    5. Kawagoe, Toshiji & Takizawa, Hirokazu, 2012. "Level-k analysis of experimental centipede games," Journal of Economic Behavior & Organization, Elsevier, vol. 82(2), pages 548-566.
    6. Le Coq, Chloé & Tremewan, James & Wagner, Alexander K., 2015. "On the effects of group identity in strategic environments," European Economic Review, Elsevier, vol. 76(C), pages 239-252.
    7. Bernardo García-Pola & Nagore Iriberri & Jaromír Kovářík, 2020. "Hot versus cold behavior in centipede games," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 6(2), pages 226-238, December.
    8. Kulesz, Micaela M. & Dittrich, Dennis A. V., 2014. "Intergenerational Cooperation: an Experimental Study on Beliefs," MPRA Paper 58584, University Library of Munich, Germany.
    9. Eva M. Krockow & Briony D. Pulford & Andrew M. Colman, 2015. "Competitive Centipede Games: Zero-End Payoffs and Payoff Inequality Deter Reciprocal Cooperation," Games, MDPI, Open Access Journal, vol. 6(3), pages 1-11, August.
    10. Philippe Gillen & Alexander Rasch & Achim Wambach & Peter Werner, 2016. "Bid pooling in reverse multi-unit Dutch auctions: an experimental investigation," Theory and Decision, Springer, vol. 81(4), pages 511-534, November.
    11. Eva M. Krockow & Masanori Takezawa & Briony D. Pulford & Andrew M. Colman & Samuel Smithers & Toshimasa Kita & Yo Nakawake, 2018. "Commitment-enhancing tools in Centipede games: Evidencing European–Japanese differences in trust and cooperation," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 13(1), pages 61-72, January.
    12. James C. Cox & Vjollca Sadiraj, 2018. "Incentives," Experimental Economics Center Working Paper Series 2018-01, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.
    13. Cardella, Eric, 2012. "Learning to make better strategic decisions," Journal of Economic Behavior & Organization, Elsevier, vol. 84(1), pages 382-392.
    14. Rapoport, Amnon & Stein, William E. & Parco, James E. & Nicholas, Thomas E., 2003. "Equilibrium play and adaptive learning in a three-person centipede game," Games and Economic Behavior, Elsevier, vol. 43(2), pages 239-265, May.
    15. Khan, M. Ali & Yu, Haomiao & Zhang, Zhixiang, 2015. "On the centipede game with a social norm," Mathematical Social Sciences, Elsevier, vol. 75(C), pages 16-19.
    16. Ganglmair, Bernhard & Holcomb, Alex & Myung, Noah, 2020. "Expectations of reciprocity when competitors share information: Experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 170(C), pages 244-267.
    17. Ignacio Palacios-Huerta & Oscar Volij, 2009. "Field Centipedes," American Economic Review, American Economic Association, vol. 99(4), pages 1619-1635, September.
    18. Steven D. Levitt & John A. List & Sally E. Sadoff, 2011. "Checkmate: Exploring Backward Induction among Chess Players," American Economic Review, American Economic Association, vol. 101(2), pages 975-990, April.
    19. James Tremewan & Chloé Le Coq & Alexander D. Wagner, 2013. "Social Centipedes: the Impact of Group Identity on Preferences and Reasoning," Vienna Economics Papers 1305, University of Vienna, Department of Economics.
    20. Gamba, Astrid & Regner, Tobias, 2019. "Preferences-dependent learning in the centipede game: The persistence of mistrust," European Economic Review, Elsevier, vol. 120(C).

    More about this item

    Keywords

    backward induction; representation effect; experiment; centipede game;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-01885390. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://hal.archives-ouvertes.fr/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.