Cognition and behavior in normal-form games: An experimental study

M Costa-Gomes*, VP Crawford, B Broseta

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

    461 Citations (Scopus)

    Abstract

    This paper reports experiments designed to study strategic sophistication, the extent to which behavior in games reflects attempts to predict others' decisions, taking their incentives into account. We study subjects' initial responses to normal-form games with various patterns of iterated dominance and unique pure-strategy equilibria without dominance, using a computer interface that allowed them to search for hidden payoff information, while recording their searches. Monitoring subjects' information searches along with their decisions allows us to better understand how their decisions are determined, and subjects' deviations from the search patterns suggested by equilibrium analysis help to predict their deviations from equilibrium decisions.

    Original languageEnglish
    Pages (from-to)1193-1235
    Number of pages43
    JournalEconometrica
    Volume69
    Issue number5
    Publication statusPublished - Sept 2001

    Keywords

    • INFORMATION
    • COORDINATION GAMES
    • STRATEGIES
    • INDUCTION
    • EQUILIBRIUM
    • experimental economics
    • PLAYERS MODELS
    • COMPLEXITY
    • noncooperative games
    • RATIONALITY
    • strategic sophistication
    • DOMINANCE
    • cognition
    • SELECTION

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