Boundary and interior equilibria: what drives convergence in a ‘beauty contest’?

Andrea Morone () and Piergiuseppe Morone ()

MPRA Paper from University Library of Munich, Germany

Abstract: We present an experimental game in the p-beauty framework. Building on the definitions of boundary and interior equilibria, we distinguish between ‘speed of convergence towards the game-theoretic equilibrium’ and ‘deviations of the guesses from the game-theoretic equilibrium’. In contrast to earlier findings (Güth et al., 2002), we show, under a different game parameterisation, that (i) interior equilibria initially produce smaller deviation of the guesses from the game-theoretic equilibrium compared to boundary equilibria; (ii) interior and boundary equilibria do not differ in the timeframe needed for convergence; (iii) the speed of convergence is higher in the boundary equilibrium.

Keywords: Guessing game; p-beauty contest; individual behaviour (search for similar items in EconPapers)
JEL-codes: C72 C91 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-ifn
Date: 2008
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Persistent link: http://EconPapers.repec.org/RePEc:pra:mprapa:9584

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