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Representation effects in the centipede game

Author

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  • Paolo Crosetto

    (GAEL - Laboratoire d'Economie Appliquée de Grenoble - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UGA [2016-2019] - Université Grenoble Alpes [2016-2019])

  • Marco Mantovani

    (UNIMIB - Università degli Studi di Milano-Bicocca = University of Milano-Bicocca)

Abstract

We explore the effects on strategic behavior of alternative representations of a centipede game that differ in terms of complexity. In a laboratory experiment, we manipulate the way in which payoffs are presented to subjects in two different ways. In both cases, information is made less accessible relative to the standard representation of the game. Results show that these manipulations shift the distribution of take nodes further away from the equilibrium prediction. The evidence is consistent with the view that failures of game-form recognition and the resulting limits to strategic reasoning are crucial for explaining non-equilibrium behavior in the centipede game.

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  • Paolo Crosetto & Marco Mantovani, 2018. "Representation effects in the centipede game," Post-Print hal-01885390, HAL.
    • Handle: RePEc:hal:journl:hal-01885390
    DOI: 10.1371/journal.pone.0204422
    Note: View the original document on HAL open archive server: https://hal.science/hal-01885390
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    References listed on IDEAS

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    1. Neligh, Nathaniel, 2020. "Vying for dominance: An experiment in dynamic network formation," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 719-739.

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    Keywords

    experiment; representation effect; backward induction; centipede game;
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