Cognitive hierarchies in the minimizer game

Ulrich Berger, Hannelore De Silva and Gerlinde Fellner-Röhling ()

Journal of Economic Behavior & Organization, 2016, vol. 130, issue C, 337-348

Abstract: Experimental tests of choice predictions in one-shot games show only little support for Nash equilibrium (NE). Poisson Cognitive Hierarchy (PCH) and level-k (LK) are behavioral models of the thinking-steps variety where subjects differ in the number of levels of iterated reasoning they perform. Camerer et al. (2004) claim that substituting the Poisson parameter τ=1.5 yields a parameter-free PCH model (pfPCH) which predicts experimental data considerably better than NE. We design a new multi-person game, the Minimizer Game, as a testbed to compare initial choice predictions of NE, pfPCH and LK. Data obtained from two large-scale online experiments strongly reject NE and LK, but are well in line with the point-prediction of pfPCH.

Keywords: Behavioral game theory; Experimental games; Poisson cognitive hierarchy; Level-k model; Minimizer game (search for similar items in EconPapers)
JEL-codes: C72 C90 D01 D83 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:130:y:2016:i:c:p:337-348

DOI: 10.1016/j.jebo.2016.08.004

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