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Field and Lab Convergence in Poisson LUPI Games

Östling, Robert and Wang, Joseph Tao-yi and Chou, Eileen and Camerer, Colin F. (2007) Field and Lab Convergence in Poisson LUPI Games. SSE/EFI Working Paper Series in Economics and Finance, 671. .

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In the lowest unique positive integer (LUPI) game, players pick positive integers and the player who chose the lowest unique number (not chosen by anyone else) wins a fixed prize. We derive theoretical equilibrium predictions, assuming fully rational players with Poisson-distributed uncertainty about the number of players. We also derive predictions for boundedly rational players using quantal response equilibrium and a cognitive hierarchy of rationality steps with quantal responses. The theoretical predictions are tested using both field data from a Swedish gambling company, and laboratory data from a scaled-down version of the field game. The field and lab data show similar patterns: in early rounds, players choose very low and very high numbers too often, and avoid focal ("round") numbers. However, there is some learning and a surprising degree of convergence toward equilibrium. The cognitive hierarchy model with quantal responses can account for the basic discrepancies between the equilibrium prediction and the data.

Item Type:Report or Paper (Working Paper)
Related URLs:
Camerer, Colin F.0000-0003-4049-1871
Additional Information:The first two authors, Joseph Tao-yi Wang and Robert Östling, contributed equally to this paper. We are grateful for helpful comments from Tore Ellingsen, Magnus Johannesson, Botond Köszegi, David Laib- son, Erik Lindqvist, Stefan Molin, Noah Myung, Rosemarie Nagel, Charles Noussair, Carsten Schmidt, Dmitri Vinogradov, Mark Voorneveld, Jörgen Weibull, seminar participants at California Institute of Technology, Stockholm School of Economics, Mannheim Empirical Research Summer School 2007, and UC Santa Barbara Cognitive Neuroscience Summer School 2007. Robert Östling acknowledges financial support from the Jan Wallander and Tom Hedelius Foundation. Colin Camerer acknowledges support from the NSF HSD program, HSFP, and the Betty and Gordon Moore Foundation.
Funding AgencyGrant Number
NSF Human and Social Dynamics (HSD) programUNSPECIFIED
Human Frontier Science Program (HSFP)UNSPECIFIED
Gordon and Betty Moore FoundationUNSPECIFIED
Subject Keywords:Population uncertainty, Poisson game, QRE, congestion game, guessing game, experimental methods, behavioral game theory, cognitive hierarchy
Series Name:SSE/EFI Working Paper Series in Economics and Finance
Issue or Number:671
Classification Code:JEL classification: C72, C92, L83, C93.
Record Number:CaltechAUTHORS:20110203-144706555
Persistent URL:
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:21988
Deposited By: Tony Diaz
Deposited On:17 Nov 2012 00:16
Last Modified:03 Oct 2019 02:32

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