# Level-k reasoning and time pressure in the 11–20 money request game

Lindnera, Florian, and Matthias Sutter. “Level-k reasoning and time pressure in the 11–20 money request game." Economics Letters (2013). PDF (359 K) form Economics Letters ; working paper version: uibk.ac.at 提供的 [PDF];

## ==Notes by yinung==

The 11–20 money request game of AR (Arad and Rubinstein (2012a)) is a simultaneous move game in which two players request a number of points between 11 and 20, which they receive for sure. One player may receive 20 extra points if he/she requests one point less than the other player does.

### Selected experimental results

Treatment 的設計

BASE: 重覆 AR (2012, AER)
BASE-T: 和 TIME 一樣, 但是時間給 3 min ( v.s. 15 秒)
TIME: (有時間壓力) 遊戲開始才知道要選 [11,20]、bonus =20 和其條件。 決策時間只有 15 秒

R-BASE、R-BASE-T、R-TIME 是以上的 one-shot game, 重覆玩5回合 (每回合3 min, 除了 R-TIME 是 15秒)

Table 1. Relative frequencies of actions in different treatments.
Action 11 (%) 12 (%) 13 (%) 14 (%) 15 (%) 16 (%) 17 (%) 18 (%) 19 (%) 20 (%) N
Equilibrium 25 25 20 15 10 5
AR (2012) 4 0 3 6 1 6 32 30 12 6 108
BASE 1 3 4 6 3 6 20 38 14 6 80
BASE-T 4 1 1 8 6 5 15 34 19 8 80
TIME 3 3 11 5 20 5 18 17 11 8 65
Table 2. Actions in the repeated game.
Action 11 (%) 12 (%) 13 (%) 14 (%) 15 (%) 16 (%) 17 (%) 18 (%) 19 (%) 20 (%) N
Equilibrium 25 25 20 15 10 5
R-BASE 0 1 2 2 7 11 20 24 21 13 400
R-BASE-T 1 3 2 4 8 9 21 22 18 12 400
R-TIME 3 3 3 5 8 11 18 24 12 13 325

## Abstract

Arad and Rubinstein (2012a) have designed a novel game to study level-k

reasoning experimentally. Just like them, we find that the depth of reasoning is very limited and clearly different from that in equilibrium play. We show that such behavior is even robust to repetitions; hence there is, at best, little learning. However, under time pressure, behavior is, perhaps coincidentally, closer to that in equilibrium play. We argue that time pressure evokes intuitive reasoning and reduces the focal attraction of choosing higher (and per se more profitable) numbers in the game.

• C91;
• C72

## References (from EL)

• Greiner, 2004, Ben. Greiner, An online recruitment system for economic experiments, Kurt Kremer, Volker Macho (Eds.), Forschung und Wissenschaftliches Rechnen 2003, Gesellschaft für Wissenschaftliche Datenverarbeitung Göttingen, Göttingen (2004), pp. 79–93.View Record in Scopus| Cited By in Scopus (1)
• Nagel, 1995, Rosemarie Nagel, Unraveling in guessing games: an experimental study, American Economic Review, 85 (5) (1995), pp. 1313–1326.
• Roth and Ockenfels, 2002, Alvin E. Roth, Axel Ockenfels, Last-minute bidding and the rules for ending second-price auctions: evidence from eBay and Amazon auctions on the internet, American Economic Review, 92 (5) (2002), pp. 1138–1151.
• Stahl and Wilson, 1995, Dale O. Stahl, Paul W. Wilson, On players’ models of other players: theory and experimental evidence, Games and Economic Behavior, 10 (1) (1995), pp. 213–254.
By yinung 已加上的標籤

# Myopic loss aversion: Information feedback vs. investment flexibility

Charles Bellemare, Michaela Krausee, Sabine Krfgerf,Chendi Zhang (2005) “Myopic loss aversion: Information feedback vs. investment flexibility“. Economics Letters, vol., 87, pp.319 – 324. *****

## ==notes by yinung==

### 主要實驗設計:

H: 投資期間1期, 資訊迴饋頻率每1期
M: 投資期間3期, 資訊迴饋頻率每1期
L: 投資期間3期, 資訊迴饋頻率每3期

Bellemare et al. (2005) 實驗結果是: 投資額度 L~M>H

## Results

• We confirm the works by Gneezy and Potters (1997) and others building on it, and furthermore find that experimentally induced myopia in combination with loss aversion remained to affect investment behavior systematically even when flexibility in adjusting investment was no longer varied. MLA is driven by information feedback.

## Abstract

We experimentally disentangle the effect of information feedback from the effect of investment flexibility on the investment behavior of a myopically loss averse investor. Our findings show that varying the information condition alone suffices to induce behavior that is in line with the hypothesis of Myopic Loss Aversion.

# Are teams prone to myopic loss aversion? An experimental study on individual versus team investment behavior*

Matthias Sutter (2007) “Are teams prone to myopic loss aversion? An experimental study on individual versus team investment behavior."Economics Letters, Volume 97, Issue 2, November 2007, Pages 128–132. DOI; ***

## ==original abstract==

Myopic loss aversion (MLA) has been found to have a persistent influence on individual decision making under risk. In this paper I show that team decision making attenuates MLA, but that teams are also prone to MLA