Cognitive Hierarchies in the Minimizer Game

Ulrich Berger, Hannelore De Silva () and Gerlinde Fellner-Röhling ()
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Hannelore De Silva: Department Finance, Accounting and Statistics , Vienna University of Economics and Business

Department of Economics Working Papers from Vienna University of Economics and Business, Department of Economics

Abstract: Experimental tests of choice predictions in one-shot games show only little support for Nash equilibrium (NE). Poisson Cognitive Hierarchy (PCH) and level-k (LK) are behavioral models of the thinking-steps variety where subjects differ in the number of levels of iterated reasoning they perform. Camerer et al. (2004) claim that substituting the Poisson parameter tau = 1.5 yields a parameter-free PCH model (pfPCH) which predicts experimental data considerably better than NE. We design a new multi-person game, the Minimizer Game, as a testbed to compare initial choice predictions of NE, pfPCH and LK. Data obtained from two large-scale online experiments strongly reject NE and LK, but are well in line with the point prediction of pfPCH.

Keywords: behavioral game theory; experimental games; Poisson cognitive hierarchy; level-k model; minimizer game (search for similar items in EconPapers)
JEL-codes: C72 C90 D01 D83 (search for similar items in EconPapers)
Date: 2016-01
New Economics Papers: this item is included in nep-exp, nep-gth and nep-hpe
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Cognitive hierarchies in the minimizer game (2016)
Working Paper: Cognitive Hierarchies in the Minimizer Game (2016)
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