Investigating the Failure to Best Respond in Experimental Games

37 Pages Posted: 13 Dec 2019 Last revised: 15 Jun 2021

See all articles by Despoina Alempaki

Despoina Alempaki

University of Warwick

Andrew Colman

University of Leicester

Felix Kölle

University of Cologne - Department of Economics

Graham Loomes

University of Warwick

Briony D. Pulford

University of Leicester

Date Written: June 15, 2021

Abstract

We examine strategic sophistication using eight two-person 3×3 one-shot games. To facilitate strategic thinking, we design a ‘structured’ environment where subjects first assign subjective values to the payoff pairs and state their beliefs about their counterparts’ probable strategies, before selecting their own strategies in light of those deliberations. Our results show that a majority of strategy choices are inconsistent with the equilibrium prediction, and that only just over half of strategy choices constitute best responses to subjects’ stated beliefs. Allowing for other-regarding considerations increases best responding significantly, but the increase is rather small. We further compare patterns of strategies with those made in an ‘unstructured’ environment in which subjects are not specifically directed to think strategically. Our data suggest that structuring the pre-decision deliberation process does not affect strategic sophistication.

Keywords: equilibrium; best response; strategic thinking; social preferences; beliefs

JEL Classification: A13, C72, C91, C92, D84

Suggested Citation

Alempaki, Despoina and Colman, Andrew and Kölle, Felix and Loomes, Graham and Pulford, Briony D., Investigating the Failure to Best Respond in Experimental Games (June 15, 2021). Available at SSRN: https://ssrn.com/abstract=3493826 or http://dx.doi.org/10.2139/ssrn.3493826

Despoina Alempaki (Contact Author)

University of Warwick ( email )

Scarman Road
Coventry, CV4 7AL
United Kingdom

Andrew Colman

University of Leicester ( email )

University Road
Leicester, LE1 7RH
United Kingdom

Felix Kölle

University of Cologne - Department of Economics ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

HOME PAGE: http://https://felixkoelle.weebly.com/

Graham Loomes

University of Warwick ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom

Briony D. Pulford

University of Leicester ( email )

University Road
Leicester, LE1 7RH
United Kingdom
00441162297172 (Phone)

HOME PAGE: http://www.le.ac.uk/pc/bdp5/index.html

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