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Imperfect Choice or Imperfect Attention? Understanding Strategic Thinking in Private Information Games

Brocas, Isabelle and Carrillo, Juan D. and Wang, Stephanie W. and Camerer, Colin F. (2014) Imperfect Choice or Imperfect Attention? Understanding Strategic Thinking in Private Information Games. Review of Economic Studies, 81 (3). pp. 944-970. ISSN 0034-6527. http://resolver.caltech.edu/CaltechAUTHORS:20140904-135258928

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Abstract

To understand the thinking process in private information games, we use “Mousetracking” to record which payoffs subjects attend to. The games have three information states and vary in strategic complexity. Subjects consistently deviate from Nash equilibrium choices and often fail to look at payoffs which they need to in order to compute an equilibrium response. Choices and lookups are similar when stakes are higher. When cluster analysis is used to group subjects according to lookup patterns and choices, three clusters appear to correspond approximately to level-3, level-2, and level-1 thinking in level-k models, and a fourth cluster is consistent with inferential mistakes (as, for example, in QRE or Cursed Equilibrium theories). Deviations from Nash play are associated with failure to look at the necessary payoffs. The time durations of looking at key payoffs can predict choices, to some extent, at the individual level and at the trial-by-trial level.


Item Type:Article
Related URLs:
URLURL TypeDescription
http://dx.doi.org/10.1093/restud/rdu001 DOIArticle
http://restud.oxfordjournals.org/content/81/3/944PublisherArticle
http://restud.oxfordjournals.org/content/81/3/944/suppl/DC1PublisherSupplementary Data
ORCID:
AuthorORCID
Camerer, Colin F.0000-0003-4049-1871
Additional Information:© The Author 2014. Published by Oxford University Press on behalf of The Review of Economic Studies Limited. First version received July 2010; final version accepted June 2013 (Eds.). Advance access publication 15 April 2014. Support of LUSK Center (IB), the Office of the Provost at USC and the Microsoft Corporation (JDC), HFSP, NSF and Moore Foundation grants (CFC) and Moore Foundation (SWW) is gratefully acknowledged. Yi Zhu provided excellent research assistance. Mousetracking was developed by Chris Crabbe and Walter Yuan as an extension to their Multistage program. We are very grateful for their remarkable combination of enthusiasm and speed. Helpful comments were received from audiences at USC Law, Moore Foundation Retreat (March 09), ESA Washington 2009, Stanford SITE 2009, Southampton and Edinburgh.
Funders:
Funding AgencyGrant Number
LUSK CenterUNSPECIFIED
USC Office of the ProvostUNSPECIFIED
Microsoft CorporationUNSPECIFIED
Human Frontier Science Program (HFSP)UNSPECIFIED
NSFUNSPECIFIED
Gordon and Betty Moore FoundationUNSPECIFIED
Subject Keywords:Behavioral game theory; Cognitive hierarchy; Mousetracking; Eyetracking; Level-k; Betting games
Classification Code:JEL: C72, C92
Record Number:CaltechAUTHORS:20140904-135258928
Persistent URL:http://resolver.caltech.edu/CaltechAUTHORS:20140904-135258928
Official Citation:Isabelle Brocas, Juan D. Carrillo, Stephanie W. Wang, and Colin F. Camerer Imperfect Choice or Imperfect Attention? Understanding Strategic Thinking in Private Information Games Review of Economic Studies (2014) 81 (3): 944-970 first published online April 15, 2014 doi:10.1093/restud/rdu001
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:49249
Collection:CaltechAUTHORS
Deposited By: Tony Diaz
Deposited On:04 Sep 2014 21:15
Last Modified:03 Mar 2016 22:20

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