Playing the wrong game: An experimental analysis of relational complexity and strategic misrepresentation
It has been suggested that players often produce simplified and/or misspecified mental representations of interactive decision problems (Kreps, 1990). We submit that the relational structure of players’ preferences in a game induces cognitive complexity, and may be an important driver of such simplifications. We provide a formal classification of order structures in two-person normal form games based on the two properties of monotonicity and projectivity, and present experiments in which subjects must first construct a representation of games of different relational complexity, and subsequently play the games according to their own representation. Experimental results support the hypothesis that relational complexity matters. More complex games are harder to represent, and this difficulty is correlated with measures of short term memory capacity. Furthermore, most erroneous representations are less complex than the correct ones. In addition, subjects who misrepresent the games behave consistently with such representations according to simple but rational decision criteria. This suggests that in many strategic settings individuals may act optimally on the ground of simplified and mistaken premises.
|Date of creation:||2005|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www-ceel.economia.unitn.it
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- Jacob K. Goeree & Charles A. Holt, 2000.
"Ten Little Treasures of Game Theory and Ten Intuitive Contradictions,"
Virginia Economics Online Papers
333, University of Virginia, Department of Economics.
- Jacob K. Goeree & Charles A. Holt, 2001. "Ten Little Treasures of Game Theory and Ten Intuitive Contradictions," American Economic Review, American Economic Association, vol. 91(5), pages 1402-1422, December.
- Jacob K Goeree & Charles A Holt, 2004. "Ten Little Treasures of Game Theory and Ten Intuitive Contradictions," Levine's Working Paper Archive 618897000000000900, David K. Levine.
- A. Rubinstein, 1999.
"Economics and Language,"
Princeton Economic Theory Papers
00s6, Economics Department, Princeton University.
- Giovanna Devetag & Massimo Warglien, 2002.
"Games and Phone Numbers: Do Short Term Memory Bounds Affect Strategy Behavior?,"
ROCK Working Papers
018, Department of Computer and Management Sciences, University of Trento, Italy, revised 13 Jun 2008.
- 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.
- Maria Giovanna Devetag & Massimo Warglien, 2002. "Games and phone numbers: do short term memory bounds affect strategic behavior?," CEEL Working Papers 0211, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
- Rubinstein, Ariel, 1996. "Why Are Certain Properties of Binary Relations Relatively More Common in Natural Language?," Econometrica, Econometric Society, vol. 64(2), pages 343-55, March.
- Broseta, Bruno & Costa-Gomes, Miguel & Crawford, Vincent P., 2000.
"Cognition and Behavior in Normal-Form Games: An Experimental Study,"
University of California at San Diego, Economics Working Paper Series
qt0fp8278k, Department of Economics, UC San Diego.
- Costa-Gomes, Miguel & Crawford, Vincent P & Broseta, Bruno, 2001. "Cognition and Behavior in Normal-Form Games: An Experimental Study," Econometrica, Econometric Society, vol. 69(5), pages 1193-1235, September.
- Miguel Costa-Gomes & Vincent P. Crawford & Bruno Broseta, . "Cognition and Behavior in Normal-Form Games:An Experimental Study," Discussion Papers 00/45, Department of Economics, University of York.
- Costa-Gomes, Miguel & Crawford, Vincent P. & Broseta, Bruno, 1998. "Cognition and Behavior in Normal-Form Games: An Experimental Study," University of California at San Diego, Economics Working Paper Series qt1vn4h7x5, Department of Economics, UC San Diego.
- repec:cup:cbooks:9780521593069 is not listed on IDEAS
- 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.
- Knez, Marc & Camerer, Colin, 2000. "Increasing Cooperation in Prisoner's Dilemmas by Establishing a Precedent of Efficiency in Coordination Games," Organizational Behavior and Human Decision Processes, Elsevier, vol. 82(2), pages 194-216, July.
- Pillutla, Madan M. & Chen, Xiao-Ping, 1999. "Social Norms and Cooperation in Social Dilemmas: The Effects of Context and Feedback, , ," Organizational Behavior and Human Decision Processes, Elsevier, vol. 78(2), pages 81-103, May.
- repec:cup:cbooks:9780521789905 is not listed on IDEAS
- Simon, Herbert A. & Schaeffer, Jonathan, 1992. "The game of chess," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 1, pages 1-17 Elsevier.
- Nagel, Rosemarie, 1993. "Experimental Results on Interactive Competitive Guessing," Discussion Paper Serie B 236, University of Bonn, Germany.
When requesting a correction, please mention this item's handle: RePEc:trn:utwpce:0504. 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: (Marco Tecilla)
If references are entirely missing, you can add them using this form.