Investigating the failure to best respond in experimental games

Despoina Alempaki (), Andrew M. Colman, Felix Kölle, Graham Loomes and Briony Pulford
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Despoina Alempaki: University of Warwick
Andrew M. Colman: University of Leicester
Graham Loomes: University of Warwick

Experimental Economics, 2022, vol. 25, issue 2, No 9, 656-679

Abstract: Abstract We examine strategic sophistication using eight two-person 3 × 3 one-shot games. To facilitate strategic thinking, we design a ‘structured’ environment where subjects first assign subjective values to the payoff pairs and state their beliefs about their counterparts’ probable strategies, before selecting their own strategies in light of those deliberations. Our results show that a majority of strategy choices are inconsistent with the equilibrium prediction, and that only just over half of strategy choices constitute best responses to subjects’ stated beliefs. Allowing for other-regarding considerations increases best responding significantly, but the increase is rather small. We further compare patterns of strategies with those made in an ‘unstructured’ environment in which subjects are not specifically directed to think strategically. Our data suggest that structuring the pre-decision deliberation process does not affect strategic sophistication.

Keywords: Equilibrium; Best response; Strategic thinking; Social preferences; Beliefs (search for similar items in EconPapers)
JEL-codes: A13 C72 C91 C92 D84 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s10683-021-09725-8

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