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Level-k reasoning and time pressure in the 11-20 money request game

  • Florian Lindner

    ()

  • Matthias Sutter

    ()

Arad and Rubinstein (2012a) have designed a novel game to study level-k reasoning experimentally. Just like them, we find that the depth of reasoning is very limited and clearly different from equilibrium play. We show that such behavior is even robust to repetitions, hence there is, at best, little learning. However, under time pressure, behavior is, perhaps coincidentally, closer to equilibrium play. We argue that time pressure evokes intuitive reasoning and reduces the focal attraction of choosing higher (and per se more profitable) numbers in the game.

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File URL: http://eeecon.uibk.ac.at/wopec2/repec/inn/wpaper/2013-13.pdf
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Paper provided by Faculty of Economics and Statistics, University of Innsbruck in its series Working Papers with number 2013-13.

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Length: 17
Date of creation: Jun 2013
Date of revision:
Handle: RePEc:inn:wpaper:2013-13
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  1. Sutter, Matthias & Kocher, Martin G. & Strauß, Sabine, 2003. "Bargaining under time pressure in an experimental ultimatum game," Munich Reprints in Economics 18220, University of Munich, Department of Economics.
  2. Kocher, Martin G. & Sutter, Matthias, 2006. "Time is money--Time pressure, incentives, and the quality of decision-making," Journal of Economic Behavior & Organization, Elsevier, vol. 61(3), pages 375-392, November.
  3. Kocher, Martin G. & Sutter, Matthias, 2006. "Time is money - Time pressure, incentives, and the quality of decision-making," Munich Reprints in Economics 18184, University of Munich, Department of Economics.
  4. Vincent P. Crawford & Miguel A. Costa-Gomes, 2006. "Cognition and Behavior in Two-Person Guessing Games: An Experimental Study," American Economic Review, American Economic Association, vol. 96(5), pages 1737-1768, December.
  5. Ayala Arad & Ariel Rubinstein, 2012. "The 11-20 Money Request Game: A Level-k Reasoning Study," American Economic Review, American Economic Association, vol. 102(7), pages 3561-73, December.
  6. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
  7. Greiner, Ben, 2004. "An Online Recruitment System for Economic Experiments," MPRA Paper 13513, University Library of Munich, Germany.
  8. Ariel Rubinstein, 2006. "Instinctive and Cognitive Reasoning: A Study of Response Times," Working Papers 2006.36, Fondazione Eni Enrico Mattei.
  9. Stahl Dale O. & Wilson Paul W., 1995. "On Players' Models of Other Players: Theory and Experimental Evidence," Games and Economic Behavior, Elsevier, vol. 10(1), pages 218-254, July.
  10. Arad, Ayala & Rubinstein, Ariel, 2012. "Multi-dimensional iterative reasoning in action: The case of the Colonel Blotto game," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 571-585.
  11. 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 947-69, September.
  12. Vincent P. Crawford & Miguel A. Costa-Gomes & Nagore Iriberri, 2013. "Structural Models of Nonequilibrium Strategic Thinking: Theory, Evidence, and Applications," Journal of Economic Literature, American Economic Association, vol. 51(1), pages 5-62, March.
  13. Nagel, Rosemarie, 1995. "Unraveling in Guessing Games: An Experimental Study," American Economic Review, American Economic Association, vol. 85(5), pages 1313-26, December.
  14. Ariel Rubinstein, 2007. "Instinctive and Cognitive Reasoning: Response Times Study," Levine's Bibliography 321307000000001011, UCLA Department of Economics.
  15. Grosskopf, Brit & Nagel, Rosemarie, 2008. "The two-person beauty contest," Games and Economic Behavior, Elsevier, vol. 62(1), pages 93-99, January.
  16. Fehr, Dietmar & Kübler, Dorothea & Danz, David N., 2008. "Information and Beliefs in a Repeated Normal-Form Game," IZA Discussion Papers 3627, Institute for the Study of Labor (IZA).
  17. Stahl, Dale II & Wilson, Paul W., 1994. "Experimental evidence on players' models of other players," Journal of Economic Behavior & Organization, Elsevier, vol. 25(3), pages 309-327, December.
  18. Kocher, Martin G. & Pahlke, Julius & Trautmann, Stefan T., 2011. "Tempus Fugit: Time Pressure in Risky Decisions," Discussion Papers in Economics 12221, University of Munich, Department of Economics.
  19. Alvin E. Roth & Axel Ockenfels, 2002. "Last-Minute Bidding and the Rules for Ending Second-Price Auctions: Evidence from eBay and Amazon Auctions on the Internet," American Economic Review, American Economic Association, vol. 92(4), pages 1093-1103, September.
  20. Sutter, Matthias & Kocher, Martin & Strau[ss], Sabine, 2003. "Bargaining under time pressure in an experimental ultimatum game," Economics Letters, Elsevier, vol. 81(3), pages 341-347, December.
  21. Miguel A. Costa-Gomes & Georg Weizs�cker, 2008. "Stated Beliefs and Play in Normal-Form Games," Review of Economic Studies, Oxford University Press, vol. 75(3), pages 729-762.
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