A Model of Noisy Introspection
This paper presents a theoretical model of noisy introspection designed to explain behavior in games played only once. The equilibrium determines layers of beliefs about others' beliefs about ..., etc., but allows for surprises by relaxing the equilibrium requirement that belief distributions coincide with decision distributions. The paper contains a convergence proof and reports estimated introspection and error parameters for data from 37 one-shot matrix games. The accuracy of the model is compared with that of two alternative approaches: the Nash equilibrium and the logit quantal response equilibrium.
References listed on IDEAS
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- 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, 2000. "Ten Little Treasures of Game Theory and Ten Intuitive Contradictions," Virginia Economics Online Papers 333, University of Virginia, Department of Economics.
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- Charles A. Holt & Jacob K. Goeree, 1999. "Stochastic Game Theory: For Playing Games, Not Just for Doing Theory," Virginia Economics Online Papers 306, University of Virginia, Department of Economics.
- Olcina, Gonzalo & Urbano, Amparo, 1994. "Introspection and Equilibrium Selection in 2 x 22 Matrix Games," International Journal of Game Theory, Springer;Game Theory Society, vol. 23(3), pages 183-206. Full references (including those not matched with items on IDEAS)
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