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==

什麼是 11–20 money request game

兩人一組player 1 and player 2, 每人選一個數字 x1, x2  ~ [11,20]。每人將得到 x_i, i=1, 2; 但如果 x_i < x_j 且 x_i +1 = x_j (即所選的數字比對手恰好少 1), 則 player i 將額外獲得 20 的 bonus.

原文:
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.

主要結論

一般人通常是 level-0 到 level-k 的思考.

重覆 game 並不會有 learning 的現象

時間有壓力 (只有 15 sec.  v.s. 3 min.), 結果更接近理論值 (思考快, 直覺上會有更深的 level thinking)

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.

JEL classification

  • 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.
廣告

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==

主要結論:

只要資訊頻率降低, 即可讓投資風險資產意願提高.

主要實驗設計:

在於資訊迴饋頻率 frequent/infrequent, 其 treatment 有三種:

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.

image

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; ***

==notes by yinung==

此文之實驗研究細節,可參考 Team decision making under risk and myopic loss aversion 一文, or see 2005-Sutter-team decision-working paper

==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