A dynamic level-k model in sequential games

Ho, Teck-Hua, and Xuanming Su. “A dynamic level-k model in sequential games." Management Science 59.2 (2013): 452-469. berkeley.edu 提供的 [PDF]


Backward induction is a widely accepted principle for predicting behavior in sequential games. In the classic example of the “centipede game,” however, players frequently violate this principle. An alternative is a “dynamic level-k” model, where players choose a rule from a rule hierarchy. The rule hierarchy is iteratively defined such that the level-k rule is a best response to the level-(k-1) rule, and the level- rule corresponds to backward induction. Players choose rules based on their best guesses of others’ rules and use historical plays to improve their guesses. The model captures two systematic violations of backward induction in centipede games, limited induction and repetition unraveling. Because the dynamic level-k model always converges to backward induction over repetition, the former can be considered to be a tracing procedure for the latter. We also examine the generalizability of the dynamic level-k model by applying it to explain systematic violations of backward induction in sequential bargaining games. We show that the same model is capable of capturing these violations in two separate bargaining experiments.

==see also==

  • Camerer, C. and Ho, T-H “Behavioral Game Theory Experiments and Modeling," In Handbook of Game Theory, Forthcoming. PDF File provided by berkeley
  • Ho, T-H. “Individual Learning in Games," Blume, L. and Durlauf, S. (eds.) The New Palgrave Dictionary of Economics: Design of Experiments and Behavioral Economics, Palgrave Macmillian, 2008. PDF File
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  • 這篇和選美賽局 beauty contest 有關
    Ho, T-H., Camerer, C., and Weigelt, K., “Iterated Dominance and Iterated Best Response in Experimental P-Beauty Contests," The American Economic Review, 88 (1998), 947-969. PDF File
  • Ho, T-H. and Weigelt, K., “Task Complexity, Equilibrium Selection, and Learning: An Experimental Study," Management Science, 42 (1996), 659-679. PDF File
  • Ho, T-H. and K. Weigelt, “Trust Building Among Strangers," Management Science , 51: 4, pp. 1-12, 2005. [Lead Article] [Finalist, John D. C. Little Best Paper Award]. PDF File