The Dirty Faces Game Revisited

Ralph-C Bayer () and Mickey Chan
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Mickey Chan: School of Economics, University of Adelaide

No 2009-19, School of Economics and Public Policy Working Papers from University of Adelaide, School of Economics and Public Policy

Abstract: We compare behavior in Weber's (2001) Dirty Faces Game with that in a modified version. The modifified version is designed to reduce the level of strategic uncertainty by ruling out some equilibria in weakly dominated strategies. We find that in the three-player version of the game reduced strategic uncertainty leads to increased agreement with equilibrium in situations where common knowledge of rationality is required. We conclude that a considerable fraction of deviation from equilibrium is caused by the lack of common knowledge of rationality. We don't find this effect in the two-player version of the game.

Keywords: Iterative reasoning; strategic uncertainty; common knowledge of rationality (search for similar items in EconPapers)
JEL-codes: C91 D83 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2009
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: The Dirty Faces Game Revisited (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:adl:wpaper:2009-19

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