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Level-n Bounded Rationality on a Level Playing Field of Sequential Games

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  • Ernan Haruvy
  • Dale Stahl

Abstract

We report experimental results using a multi-task for simple two-player, two- stage extensive-form games. It is suggested that by creating the perception of a "level playing field" the participants are relieved of responsibility for others since competition on a level playing field is presumed to be fair a priori. Consistent with this suggestion, we find that the vast majority of behavior is individualistic. Moreover, we find that a straightforward extension of the Level-n theory of bounded rationality fits this data remarkably well. We also extend this theory to allow other-regarding preferences, and find that about 15% of the population behaves as if utilitarian and/or spiteful

Suggested Citation

  • Ernan Haruvy & Dale Stahl, 2004. "Level-n Bounded Rationality on a Level Playing Field of Sequential Games," Econometric Society 2004 North American Winter Meetings 126, Econometric Society.
    • Handle: RePEc:ecm:nawm04:126
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    More about this item

    Keywords

    Bounded rationality; sequential games;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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