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Inspired and inspiring: Hervé Moulin and the discovery of the beauty contest game

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Abstract

We draw an unusually detailed picture of a discovery, the beauty contest game – with Hervé Moulin as the center of the initial inspiration. Since its inception, the beauty contest game and the descriptive level k model has widely contributed to the growth of experimental and behavioral economics and expanded also to other areas within and outside of economics. We illustrate, in particular, the recent interaction between macroeconomic theorists and experimenters, who independently had worked on the puzzles and consequences due to beauty contest features. Furthermore, we introduce a new variety of the two-person beauty contest game with two different payoff structures that leads to different game-theoretic properties unperceived by naïve subjects and game theory experts alike.

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  • Rosemarie Nagel & Christoph Bühren & Björn Frank, 2016. "Inspired and inspiring: Hervé Moulin and the discovery of the beauty contest game," Economics Working Papers 1539, Department of Economics and Business, Universitat Pompeu Fabra, revised Nov 2016.
    • Handle: RePEc:upf:upfgen:1539
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    3. Hanaki, Nobuyuki & Koriyama, Yukio & Sutan, Angela & Willinger, Marc, 2019. "The strategic environment effect in beauty contest games," Games and Economic Behavior, Elsevier, vol. 113(C), pages 587-610.
    4. Mauersberger, Felix & Nagel, Rosemarie & Bühren, Christoph, 2020. "Bounded rationality in Keynesian beauty contests: A lesson for central bankers?," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 14, pages 1-38.
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    8. Nagel, Rosemarie & Bühren, Christoph & Frank, Björn, 2017. "Inspired and inspiring: Hervé Moulin and the discovery of the beauty contest game," Mathematical Social Sciences, Elsevier, vol. 90(C), pages 191-207.
    9. Marx, Robert & Lehmann-Waffenschmidt, Marco, 2022. "The Keynesian beauty contest revisited," Journal of Economic Behavior & Organization, Elsevier, vol. 204(C), pages 164-181.
    10. Zafer Akin, 2023. "Asymmetric guessing games," Theory and Decision, Springer, vol. 94(4), pages 637-676, May.
    11. Marcus Giamattei, 2022. "Can Cold Turkey Reduce Inflation Inertia? Evidence on Disinflation and Level‐k Thinking from a Laboratory Experiment," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 54(8), pages 2477-2517, December.
    12. Gisèle Umbhauer, 2023. "The puzzling three-player beauty contest game: play 10 to win," Working Papers of BETA 2023-16, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
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    14. Mauersberger, Felix, 2019. "Thompson Sampling: Endogenously Random Behavior in Games and Markets," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203600, Verein für Socialpolitik / German Economic Association.
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    18. Teck-Hua Ho & So-Eun Park & Xuanming Su, 2021. "A Bayesian Level- k Model in n -Person Games," Management Science, INFORMS, vol. 67(3), pages 1622-1638, March.
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    More about this item

    Keywords

    Keynes; Beauty Contest Games; History; Level k; Micro-; Macro-; Neuro-Economic Experiments.;
    All these keywords.

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • D87 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Neuroeconomics
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations
    • N80 - Economic History - - Micro-Business History - - - General, International, or Comparative

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    This paper has been announced in the following NEP Reports:

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