Guessing with negative feedback: an experiment

Raisonnement divinatoire en feedback négatif: une expérience

Angela Sutan and Marc Willinger

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Abstract: We investigate experimentally a new variant of the beauty contest game (BCG) in which players' actions are strategic substitutes (a negative feedback BCG). Our results show that chosen numbers are closer to the rational expectation equilibrium than in a strategic complements environment (a positive feedback BCG). We also find that the estimated average depth of reasoning from the cognitive hierarchy model does not differ between the two environments. We show that the difference may be attributed to the fact that additional information is more valuable when players' actions are strategic substitutes rather than strategic complements, in line with other recent experimental findings.

Keywords: GUESSING GAMES; NEGATIVE FEEDBACK; STRATEGIC SUBSTITUTES VS. STRATEGIC COMPLEMENTS (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (42)

Published in Journal of Economic Dynamics and Control, 2009, 33 (5), pp.1123-1133. ⟨10.1016/j.jedc.2009.01.005⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02662324

DOI: 10.1016/j.jedc.2009.01.005

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