Stated Beliefs and Play in Normal-Form Games

Using data on one-shot games, we investigate whether players' actions can be viewed as responses to underlying expectations about their opponent's behaviour. In our laboratory experiments, subjects play a set of 14 two-person 3x3 games and state beliefs about which actions they expect thei...

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Bibliographic Details
Published in:The Review of economic studies 2008-07, Vol.75 (3), p.729-762
Main Authors: COSTA-GOMES, MIGUEL A, WEIZSÄCKER, GEORG
Format: Article
Language:English
Subjects:
C70
Calibration
D83
Economic models
Game theory
Games
Modeling
Normal form games
Parametric models
Reason
Reasoning
Risk aversion
Statistical methods
Studies
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Summary:Using data on one-shot games, we investigate whether players' actions can be viewed as responses to underlying expectations about their opponent's behaviour. In our laboratory experiments, subjects play a set of 14 two-person 3x3 games and state beliefs about which actions they expect their opponents to play. The data sets from the two tasks are largely inconsistent. Rather, we find evidence that the subjects perceive the games differently when they (i) choose actions and (ii) state beliefs--their stated beliefs reveal deeper strategic thinking than their actions. On average, they fail to best respond to their own stated beliefs in almost half of the games. The inconsistency is confirmed by estimates of a unified statistical model that jointly uses the actions and the belief statements. There, we can control for decision noise and formulate a statistical test that rejects consistency. Effects of the belief elicitation procedure on subsequent actions are mostly insignificant.
ISSN:0034-6527
1467-937X
DOI:10.1111/j.1467-937X.2008.00498.x