Equilibrium Selection in Coordination Games: An Experimental Study of the Role of Higher Order Beliefs in Strategic Decisions

Thomas Neumann and Bodo Vogt ()
Additional contact information
Bodo Vogt: Otto-von-Guericke-University Magdeburg

A chapter in Operations Research Proceedings 2016, 2018, pp 209-215 from Springer

Abstract: Abstract The equilibrium selection in games with multiple equilibria, such as coordination games, depends on one player’s beliefs about the other player’s behavior; as such, the outcome of the game depends on the players’ expectations of one another’s behavior. This study assessed the extent to which players’ higher order beliefs influence the strategic choices they make during $$2\times 2$$ coordination games. Using a quadratic scoring rule, the players’ higher order beliefs about the choices their opponent would make were directly elicited in a laboratory experiment. The players’ higher order beliefs were analyzed to ascertain the extent to which players’ depth of thinking influenced their strategic decisions. In addition, this study focused on the question of whether the players update their beliefs to build higher order beliefs. The findings of the study revealed that the average participant operated on four steps of strategic depth. Higher order beliefs follow different patterns. In most cases, these contrast Bayesian updating.

Date: 2018
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:oprchp:978-3-319-55702-1_29

Ordering information: This item can be ordered from
http://www.springer.com/9783319557021

DOI: 10.1007/978-3-319-55702-1_29

Access Statistics for this chapter

More chapters in Operations Research Proceedings from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().