Feigning ignorance for long-term gains

Natalie Lee

Games and Economic Behavior, 2023, vol. 138, issue C, 42-71

Abstract: In dynamic strategic interactions, a player who spies the opponent's actions might have incentives to feign ignorance and forgo immediate payoffs so that he can earn higher future payoffs by manipulating the opponent's suspicion. I model and experimentally implement the situation as a two-stage hide-and-seek game. A substantial share of the spying players fails to feign ignorance, despite the empirical suboptimality of the behavior and their largely correct predictions about opponents' suspicion. Subjects are highly heterogeneous in their tendency to feign ignorance and show only moderate learning. The players who are spied on hold empirically correct beliefs and mostly best-respond.

Keywords: Information; Spying; Observability; Dynamic games (search for similar items in EconPapers)
JEL-codes: C73 C92 D92 (search for similar items in EconPapers)
Date: 2023
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:gamebe:v:138:y:2023:i:c:p:42-71

DOI: 10.1016/j.geb.2022.11.009

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