Naive play and the process of choice in guessing games

Marina Agranov, Andrew Caplin and Chloe Tergiman ()
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Marina Agranov: California Institute of Technology and the Center for Experimental Social Science
Andrew Caplin: New York University and the Center for Experimental Social Science
Chloe Tergiman: University of British Columbia and the Center for Experimental Social Science

Journal of the Economic Science Association, 2015, vol. 1, issue 2, No 3, 146-157

Abstract: Abstract There is growing evidence that not all experimental subjects understand their strategic environment. We introduce a “choice process” (CP) protocol that aids in identifying these subjects. This protocol elicits in an incentive compatible manner provisional choices as players internalize their decision making environment. We implement the CP protocol in the modified 2/3 guessing game and use it to pinpoint players that are naive by identifying those who make weakly dominated choices some time into the play. At all time horizons these players average close to 50. This is consistent with the assumption in Level-K theory that the least sophisticated subjects (the naive ones) play uniformly over the [1–100] action space. In contrast, sophisticated players show evidence of increased understanding as time passes. We find that the CP protocol mirrors play in multiple setups with distinct time constraints. Hence it may be worth deploying more broadly to understand the interaction between decision time and choice.

Keywords: Experiment; 2/3 Guessing game; Level 0 play (search for similar items in EconPapers)
JEL-codes: C81 C91 D03 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (32)

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DOI: 10.1007/s40881-015-0003-5

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