Do people minimize regret in strategic situations? A level-k comparison
Games and Economic Behavior, 2020, vol. 124, issue C, 82-104
Regret minimization and level-k reasoning have been proposed as alternative models for rationalizing non-equilibrium behavior in games. We provide a theoretical and experimental analysis of the relationship between these two models, a relationship that has been neglected by economists. Both theories predict the same behavior in a surprisingly large number of experimentally tested games. We identify conditions under which this happens and use them to design a series of games to separate minimax regret from level-1. The experimental test of these games and data from Costa-Gomes and Crawford (2006) reveal that no one systematically minimizes regret, casting doubt on minimax regret as a relevant explanation for behavior in strategic situations.
Keywords: Regret minimization; Level-k model; Experiments; Initial responses; Mixture-of-types models (search for similar items in EconPapers)
JEL-codes: C72 C92 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:124:y:2020:i:c:p:82-104
Access Statistics for this article
Games and Economic Behavior is currently edited by E. Kalai
More articles in Games and Economic Behavior from Elsevier
Bibliographic data for series maintained by Catherine Liu ().