Does context promote higher-level thinking in the beauty contest?

R. Andrew Luccasen

Economics Letters, 2013, vol. 121, issue 3, 421-424

Abstract: Some problems are more easily solved if context is provided. A stylized result from beauty contest experiments is that most choices are consistent with level-1 or level-2 thinking rather than the Nash equilibrium. The beauty contest experiment reported in this paper includes treatments in which context is added. In these treatments, participants are told choices represent the high temperature on a future date, and the winner is the participant whose choice is closest to 2/3 of the average of all choices. The context provided in this experiment hinders, rather than enhances, higher-level thinking.

Keywords: Beauty contest; Experiment; Context; Level-k (search for similar items in EconPapers)
JEL-codes: C7 C9 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:121:y:2013:i:3:p:421-424

DOI: 10.1016/j.econlet.2013.09.024

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