IDEAS home Printed from https://ideas.repec.org/a/eee/gamebe/v150y2025icp295-311.html
   My bibliography  Save this article

Why do children pass in the centipede game? Cognitive limitations v. risk calculations

Author

Listed:
  • Brocas, Isabelle
  • Carrillo, Juan D.

Abstract

Children and adolescents from 8 to 16 years old play the centipede game in the laboratory, where non-equilibrium behavior (passing) can occur for two reasons: an inability to backward induct (cognitive limitation) or a decision to best respond to the empirical risk and take a measured chance (behavioral sophistication). We find that logical abilities develop gradually. While young participants are (as expected) least likely to perform backward induction, those who do, tend to over-estimate the ability of their peers to behave similarly. With age, participants gradually learn to think strategically and to best respond to their beliefs about others. Overall, the centipede game is an ideal test case for studying the development of abilities, as it disentangles the causes for passing in young children and in teenagers. Interestingly, shrewdness does not transform into earnings, and we document for the first time a game of strategy where payoffs monotonically decrease with age.

Suggested Citation

  • Brocas, Isabelle & Carrillo, Juan D., 2025. "Why do children pass in the centipede game? Cognitive limitations v. risk calculations," Games and Economic Behavior, Elsevier, vol. 150(C), pages 295-311.
    • Handle: RePEc:eee:gamebe:v:150:y:2025:i:c:p:295-311
    DOI: 10.1016/j.geb.2025.01.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0899825625000053
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.geb.2025.01.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Developmental decision-making; Centipede game; Backward induction; Risk-taking;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:gamebe:v:150:y:2025:i:c:p:295-311. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622836 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.