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Testing Game Theory in the Field: Swedish LUPI Lottery Games

Östling, Robert and Wang, Joseph Tao-yi and Chou, Eileen Y. and Camerer, Colin F. (2010) Testing Game Theory in the Field: Swedish LUPI Lottery Games. SSE/EFI Working Paper Series in Economics and Finance, 671. Economic Research Institute (EFI), Stockholm School of Economics , Pasadena, CA. https://resolver.caltech.edu/CaltechAUTHORS:20110215-080914315

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Abstract

Game theory is usually difficult to test precisely in the field because predictions typically depend sensitively on features that are not controlled or observed. We conduct one such test using field data from the Swedish lowest unique positive integer (LUPI) game. In the LUPI game, players pick positive integers and whoever chose the lowest unique number wins a fixed prize. Theoretical equilibrium predictions are derived assuming Poisson- distributed uncertainty about the number of players, and tested using both field and laboratory data. The field and lab data show similar patterns. Despite various deviations from equilibrium, there is a surprising degree of convergence toward equilibrium. Some of the deviations from equilibrium can be rationalized by a cognitive hierarchy model.


Item Type:Report or Paper (Working Paper)
Related URLs:
URLURL TypeDescription
http://swopec.hhs.se/hastef/abs/hastef0671.htmPublisherUNSPECIFIED
ORCID:
AuthorORCID
Camerer, Colin F.0000-0003-4049-1871
Additional Information:This version: December 15, 2010. August 14, 2007, Revised December 15, 2010. The first two authors, Joseph Tao-yi Wang and Robert Östling, contributed equally to this paper. A previous version of this paper was included in Robert Östling's doctoral thesis. We are grateful for helpful comments from Vincent Crawford, Tore Ellingsen, Ido Erev, Magnus Johannesson, Botond Köszegi, David Laibson, Erik Lindqvist, Stefan Molin, Noah Myung, Rosemarie Nagel, Charles Noussair, Carsten Schmidt, Dylan Thurston, Dmitri Vinogradov, Mark Voorneveld, Jörgen Weibull, seminar participants, co-editor Robert Porter and several anonymous referees. RÖ acknowledges financial support from the Jan Wallander and Tom Hedelius Foundation. JW acknowledges support from the NSC of Taiwan (NSC 98-2410-H-002-069-MY2, NSC 99-2410-H-002-060-MY3). CFC acknowledges support from the NSF HSD program, HSFP, and the Betty and Gordon Moore Foundation. This paper is published as: Östling, Robert, Joseph Tao-yi Wang, Eileen Chou and Colin F. Camerer, (2011), 'Testing Game Theory in the Field: Swedish LUPI Lottery Games', American Economic Journal: Microeconomics, Vol. 3, August, No. 3, pages 1-33
Funders:
Funding AgencyGrant Number
Jan Wallander and Tom Hedelius FoundationUNSPECIFIED
NSC of Taiwan98-2410-H-002-069-MY2
NSC of Taiwan99-2410-H-002-060-MY3
NSF Human and Social Dynamics (HSD)UNSPECIFIED
Human Frontier Science Program (HFSP)UNSPECIFIED
Gordon and Betty Moore FoundationUNSPECIFIED
Subject Keywords:Population uncertainty, Poisson game, guessing game, experimental methods, behavioral game theory, level-k, 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:20110215-080914315
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20110215-080914315
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:22181
Collection:CaltechAUTHORS
Deposited By: Tony Diaz
Deposited On:10 Nov 2011 00:22
Last Modified:03 Oct 2019 02:35

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