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Naive play and the process of choice in guessing games

Agranov, Marina and Caplin, Andrew and Tergiman, Chloe (2015) Naive play and the process of choice in guessing games. Journal of the Economic Science Association, 1 (2). pp. 146-157. ISSN 2199-6776. http://resolver.caltech.edu/CaltechAUTHORS:20160302-155632805

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Abstract

There is growing evidence that not all experimental subjects understand their strategic environment. We introduce a “choice process” (CP) protocol that aids in identifying these subjects. This protocol elicits in an incentive compatible manner provisional choices as players internalize their decision making environment. We implement the CP protocol in the modified 2/3 guessing game and use it to pinpoint players that are naive by identifying those who make weakly dominated choices some time into the play. At all time horizons these players average close to 50. This is consistent with the assumption in Level-K theory that the least sophisticated subjects (the naive ones) play uniformly over the [1–100] action space. In contrast, sophisticated players show evidence of increased understanding as time passes. We find that the CP protocol mirrors play in multiple setups with distinct time constraints. Hence it may be worth deploying more broadly to understand the interaction between decision time and choice.


Item Type:Article
Related URLs:
URLURL TypeDescription
http://dx.doi.org/10.1007/s40881-015-0003-5DOIArticle
http://link.springer.com/article/10.1007/s40881-015-0003-5PublisherArticle
https://static-content.springer.com/esm/art%3A10.1007%2Fs40881-015-0003-5/MediaObjects/40881_2015_3_MOESM1_ESM.pdfPublisherSupplemental material
http://resolver.caltech.edu/CaltechAUTHORS:20160229-095936436Related ItemCaltech Social Science Working Paper 1334R
Additional Information:Copyright Economic Science Association 2015. Received: 2 September 2014 / Revised: 4 March 2015 / Accepted: 9 March 2015 / Published online: 19 May 2015. Acknowledgments We thank Jim Andreoni, Colin Camerer, Mark Dean, John Duffy, Martin Dufwenberg, Guillaume Frechette, Drew Fudenberg, Sen Geng, P.J. Healy, Daniel Martin, Rosemarie Nagel, Muriel Niederle, Stefan Penczynski, Andy Schotter, Lise Vesterlund, Roberto Weber, the seminar participants at the Experimental Economics seminar at NYU, at the UCLA Theory Workshop, and at the Sauder School of Business at UBC.
Subject Keywords:Experiment 2/3 Guessing game Level 0 play
Classification Code:JEL D03 C81 C91
Record Number:CaltechAUTHORS:20160302-155632805
Persistent URL:http://resolver.caltech.edu/CaltechAUTHORS:20160302-155632805
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:64972
Collection:CaltechAUTHORS
Deposited By: Katherine Johnson
Deposited On:03 Mar 2016 00:12
Last Modified:03 Mar 2016 18:23

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