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Off-Path Beliefs

Author

Listed:
  • Duarte Gonçalves

    (University College London)

  • Terri Kneeland

    (University of Calgary)

  • Andreas G. B. Ziegler

    (Vrije Universiteit Amsterdam)

Abstract

The off path plays a key role in theoretical models of strategic interaction, yet, empirically, little is known about choices and beliefs off path. Using a novel experimental paradigm where off-path behaviour is well identified and mistakes are rare, we document three findings. First, participants overestimate mistake probabilities and overreact to payoff differences. Second, although off-path moves strongly predict subsequent deviations, participants underinfer from them when forming beliefs about later choices. Third, underinference is strongest among participants assigning low probability to off-path moves. They are perfection believers: following an off-path move, they continue ruling out subsequent deviations.

Suggested Citation

  • Duarte Gonçalves & Terri Kneeland & Andreas G. B. Ziegler, 2026. "Off-Path Beliefs," Tinbergen Institute Discussion Papers 26-062/I, Tinbergen Institute, revised 03 Sep 2026.
    • Handle: RePEc:tin:wpaper:20260062
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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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