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The control of game form recognition in experiments: understanding dominant strategy failures in a simple two person "guessing" game

Chou, Eileen Y. and McConnel, Margaret and Nagel, Rosemarie and Plott, Charles R. (2009) The control of game form recognition in experiments: understanding dominant strategy failures in a simple two person "guessing" game. Experimental Economics, 12 (2). pp. 159-179. ISSN 1386-4157. https://resolver.caltech.edu/CaltechAUTHORS:20140128-104116182

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Abstract

This paper focuses on instructions and procedures as the reasons that subjects fail to behave according to the predictions of game theory in two-person “guessing game” experiments. In this game, two individuals simultaneously choose a number between 0 and 100. The winner is the person whose chosen number is the closest to 2/3 of the average of the two numbers. The weakly dominant strategy is zero. Because of the simplicity of the game, the widespread failure of subjects to choose the weakly dominant strategy has been interpreted as evidence of some fundamental inability to behave strategically. By contrast, we find that subjects’ behavior reflects a lack of understanding of the game form, which we define as the relationships between possible choices, outcomes and payoffs. To a surprising degree, subjects seem to have little understanding of the experimental environment in which they are participating. If subjects do not understand the game form, the experimental control needed for testing game theory is lost. The experiments reported here demonstrate that the failure to act strategically is related to how the game is presented. We test how well subjects are able to recognize the game under a variety of different presentations of the game. Some subjects fail to recognize the game form when it is presented abstractly. When the game is transformed into a simple isomorphic game and presented in a familiar context, subjects do choose weakly dominant strategies. While our results confirm the ability of subjects to make strategic decisions, they also emphasize the need to understand the limitations of experimental subjects’ ability to grasp the game as the experimenter intends. Given these limitations, we provide suggestions for better experimental control.


Item Type:Article
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http://dx.doi.org/10.1007/s10683-008-9206-4DOIArticle
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Additional Information:© 2008 Economic Science Association. Received: 2 August 2007; Revised: 27 February 2008; Accepted: 28 May 2008; Published online: 1 August 2008. The financial support of the Caltech Laboratory of Experimental Economics and Political Science is gratefully acknowledged. Nagel acknowledges the financial support of the Spanish Ministry of Education under Grant SEJ2005-08391 and thanks the Barcelona Economics Program of CREA and Human Frontier Science Program (HFSP), and the hospitality of HSS Caltech. We thank Jordi Brandts as the editor of Experimental Economics, and two anonymous referees for their helpful comments.
Funders:
Funding AgencyGrant Number
Caltech Laboratory of Experimental Economics and Political ScienceUNSPECIFIED
Ministerio de Educación y Ciencia (MEC)SEJ2005-08391
CREA Barcelona Economics ProgramUNSPECIFIED
Human Frontier Science ProgramUNSPECIFIED
Subject Keywords:experiments, games, methodology, instructions
Issue or Number:2
Record Number:CaltechAUTHORS:20140128-104116182
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20140128-104116182
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:43531
Collection:CaltechAUTHORS
Deposited By: Susan Vite
Deposited On:29 Jan 2014 16:41
Last Modified:02 Jul 2020 18:44

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