Stochastic Choice and Noisy Beliefs in Games

Evan Friedman and Jeremy Ward

No 12338, CESifo Working Paper Series from CESifo

Abstract: We elicit subjects’ beliefs over opponents’ behavior multiple times for a given game without feedback. A large majority of subjects have stochasticity in their belief reports, which we argue cannot be explained by learning or measurement error, suggesting significant noise in subjects’ unobserved “true” beliefs. Using a structural model applied to actions and beliefs data jointly, we find that such “noisy beliefs” are equally important for explaining our data as “noisy actions”—the sort of stochastic choice given fixed beliefs that is commonly assumed in empirical research. We argue that beliefs and belief-noise are driven by the payoff-salience of actions.

Keywords: stochastic choice; noisy beliefs; belief elicitation (search for similar items in EconPapers)
JEL-codes: C72 C92 D84 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.ifo.de/DocDL/cesifo1_wp12338.pdf (application/pdf)

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:ces:ceswps:_12338

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().