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On the Salience-Based Level-k Model

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  • Irenaeus Wolff

Abstract

Crawford and Iriberri (AER, 2007) show how a level-k model can be based on salience to explain behaviour in games with distinctive action labels, taking hideand-seek games as an example. This study presents four different experiments designed to measure salience. When based on any of these empirical salience measures, their model does not explain behaviour. Modifying the model such that players follow salience when payoffs are equal, the model fits hide-and-seek data well. However, neither the original nor the modified model account for data from a discoordination game. This holds true even when incorporating the heterogeneity in measured salience perceptions.

Suggested Citation

  • Irenaeus Wolff, 2014. "On the Salience-Based Level-k Model," TWI Research Paper Series 94, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    • Handle: RePEc:twi:respas:0094
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    References listed on IDEAS

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    1. 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.
    2. Irenaeus Wolff, 2014. "On the Salience-Based Level-k Model," TWI Research Paper Series 94, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    3. Sugden, Robert, 1995. "A Theory of Focal Points," Economic Journal, Royal Economic Society, vol. 105(430), pages 533-550, May.
    4. Rubinstein, Ariel, 1999. "Experience from a Course in Game Theory: Pre- and Postclass Problem Sets as a Didactic Device," Games and Economic Behavior, Elsevier, vol. 28(1), pages 155-170, July.
    5. Nagel, Rosemarie, 1995. "Unraveling in Guessing Games: An Experimental Study," American Economic Review, American Economic Association, vol. 85(5), pages 1313-1326, December.
    6. 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.
    7. Mehta, Judith & Starmer, Chris & Sugden, Robert, 1994. "The Nature of Salience: An Experimental Investigation of Pure Coordination Games," American Economic Review, American Economic Association, vol. 84(3), pages 658-673, June.
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    1. Irenaeus Wolff, 2014. "On the Salience-Based Level-k Model," TWI Research Paper Series 94, Thurgauer Wirtschaftsinstitut, Universität Konstanz.

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    More about this item

    Keywords

    ABAA; hide and seek; cognitive hierarchy; strategic reasoning; saliency;
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