Communication, coordination and competition in the beauty contest game: Eleven classroom experiments

Virtudes Alba Fernández, Pablo Brañas-Garza, Francisca Jiménez Jiménez and Javier Rodero Cosano
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Virtudes Alba Fernández: Department of Statistics, Universidad de Jaén
Francisca Jiménez Jiménez: Department of Economics, Universidad de Jaén

No 04/-1, ThE Papers from Department of Economic Theory and Economic History of the University of Granada.

Abstract: This paper introduces some new features in the standard experimental design of the beauty contest in order to allow communication among participants. With that aim, we use the mode instead of the mean and non-rival payoffs. This design encourages students to communicate their guessed number, with a higher probability if subjects know the 0 Nash equilibrium. The lack of communication can only be explained by subjects endowed with competitive other-regarding preferences. Experiments are run in 11 classrooms ranging from 11 to 60 students in size. Participants are given at least one week to submit their guesses and a questionnaire explaining their choice. Results indicate that: i) communication induces coordination in the responses, ii) communication does not guarantee any improvement in the average reasoning level, iii) there exist significative differences according to classroom size and duration of degree.

Keywords: Beauty Contest Games; Experiments; Communication; Coordination; Competition; Meta-analysis (search for similar items in EconPapers)
JEL-codes: C91 D83 I21 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2004-01-11
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http://www.ugr.es/~teoriahe/RePEc/gra/wpaper/thepapers04_-1.pdf (application/pdf)

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Working Paper: Communication, coordination and competition in the beauty contest game: Eleven classroom experiments (2004)
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