On the persistence of strategic sophistication

We examine whether the “Level-k” model of strategic behavior generates reliable cross-game predictions at the individual level. We find no correlation in subjects' estimated levels of reasoning across two families of games. Furthermore, estimating a higher level for Ann than Bob in one family o...

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Bibliographic Details
Published in:Journal of economic theory 2015-09, Vol.159, p.369-400
Main Authors: Georganas, Sotiris, Healy, Paul J., Weber, Roberto A.
Format: Article
Language:English
Subjects:
Behavioral game theory
Cognitive hierarchy
Correlation
Economic theory
Economics
Estimating
Estimating techniques
Estimation
Game theory
Games
Level-k
Management science
Mathematical models
Predictions
Ranking
Reasoning
Studies
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Summary:We examine whether the “Level-k” model of strategic behavior generates reliable cross-game predictions at the individual level. We find no correlation in subjects' estimated levels of reasoning across two families of games. Furthermore, estimating a higher level for Ann than Bob in one family of games does not predict their ranking in the other. Direct tests of strategic reasoning generally do not predict estimated levels. Within families of games, we find that levels are fairly consistent within one family, but not the other. Our results suggest that the use of Level-k reasoning varies by game, making prediction difficult.
ISSN:0022-0531
1095-7235
DOI:10.1016/j.jet.2015.07.012