The Predominant Role of Signal Precision in Experimental Beauty Contests

Romain Baeriswyl and Camille Cornand

The B.E. Journal of Theoretical Economics, 2016, vol. 16, issue 1, 267-301

Abstract: The weight assigned to public information in Keynesian beauty contests depends on both the precision of signals and the degree of strategic complementarities. This experimental study shows that the response of subjects to changes in signal precision and the degree of strategic complementarities is qualitatively consistent with theoretical predictions, though quantitatively weaker. The weaker response of subjects to changes in the precision of signals, however, mainly drives the weight observed in the experiment, qualifying the role of strategic complementarities and overreaction in experimental beauty contests.

Keywords: heterogeneous information; beauty contest; experiment; public information (search for similar items in EconPapers)
JEL-codes: C92 D82 D84 E58 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (18)

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Related works:
Working Paper: The predominant role of signal precision in experimental beauty contest (2016)
Working Paper: The predominant role of signals’ precision in experimental beauty contest (2016)
Working Paper: The predominant role of signals’ precision in experimental beauty contest (2016)
Working Paper: The predominant role of signal precision in experimental beauty contests (2014)
Working Paper: The predominant role of signal precision in experimental beauty contest (2014)
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DOI: 10.1515/bejte-2015-0002

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