A Two-Step Guessing Game

King King Li () and Kang Rong ()
Additional contact information
King King Li: SAFTI - Shenzhen Audencia Financial Technology Institute
Kang Rong: Shanghai University of Finance and Economics

Post-Print from HAL

Abstract: We propose a two-step guessing game to measure the depth of thinking. We apply this method to the P beauty contest game. Using our method, we find that 81% of subjects do not make choice following best response reasoning while the classical method would suggest only 12%. The result suggests that the classical method has the fundamental problem that it cannot distinguish if a submitted number is due to best response reasoning or not. It also suggests that traditional level k analysis falsely attributes some sophistication to random players, and that the degree of false attribution is large. Our procedure provides an alternative way to identify whether the individual has best response reasoning which is essential for any positive level of depth of thinking and differentiates between the depth of thinking and random choice, and hence provides a very different conclusion, which is suggestive of limitations of the classical method.

Keywords: P Beauty Contest; Best Response Reasoning; Experiment (search for similar items in EconPapers)
Date: 2023-12-28
New Economics Papers: this item is included in nep-exp, nep-gth, nep-mac and nep-spo
Note: View the original document on HAL open archive server: https://audencia.hal.science/hal-04376266
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in Theory and Decision, 2023, ⟨10.1007/s11238-023-09967-3⟩

Downloads: (external link)
https://audencia.hal.science/hal-04376266/document (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04376266

DOI: 10.1007/s11238-023-09967-3

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().