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This paper proposes a structural non-equilibrium model of initial responses to incomplete-information games based on "level-k" thinking, which describes behavior in many experiments with complete-information games. We derive the model's implications in first-and second-price auctions with general information structures, compare them to equilibrium and(More)
Any government wanting to kill an opponent … would not try it at a meeting with government officials. —Comment on the poisoning of Ukrainian presidential candidate (now president) Viktor Yushchenko, quoted in C. J. Chivers (2004) … in Lake Wobegon, the correct answer is usually " c. " —Garrison Keillor (1997) on multiple-choice tests, quoted in Yigal Attali(More)
".. . professional investment may be likened to those newspaper competitions in which the competitors have to pick out the six prettiest faces from a hundred photographs, the prize being awarded to the competitor whose choice most nearly corresponds to the average preferences of the competitors as a whole; so that each competitor has to pick, not those(More)
Most applications of game theory assume equilibrium, justified by presuming either that learning will have converged to one, or that equilibrium approximates people's strategic thinking even when a learning justification is implausible. Yet several recent experimental and empirical studies suggest that people's initial responses to games often deviate(More)
We use subjects' actions in modified dictator games to perform a within-subject classification of individuals into four different types of interdependent preferences: Selfish, Social Welfare maximizers, Inequity Averse and Competitive. We elicit beliefs about other subjects' actions in the same modified dictator games to test how much of the existent(More)
We investigate whether the gender composition of teams affect their economic performance. We study a large business game, played in groups of three, where each group takes the role of a general manager. There are two parallel competitions, one involving undergraduates and the other involving MBAs. Our analysis shows that teams formed by three women are(More)
This paper compares the leading models of strategic thinking with subjects' initial responses to Van Huyck et al.'s (1990, 1991; " VHBB ") coordination games. The data favor models in which players treat their partners' decisions as correlated rather than independent. Among the equilibrium selection criteria we compare, payoff-dominant equilibrium fits(More)
Affirmative-action policies bias tournament rules in order to provide equal opportunities to a group of competitors who have a disadvantage they cannot be held responsible for. Critics argue that they distort incentives, resulting in lower individual performance, and that the selected pool of tournament winners may be inefficient. In this paper, we study(More)
We compare behavior in modified dictator games with and without role uncertainty. Subjects choose between a selfish action, a costly surplus creating action (altruistic behavior) and a costly surplus destroying action (spiteful behavior). While costly surplus creating actions are most frequent under role uncertainty (64%), selfish actions become most(More)
We study how to promote compliance with rules in everyday situations. Having access to unique data on the universe of users of all public libraries in Barcelona, we test the effect of sending email messages with different contents. We find that users return their items earlier if asked to do so in a simple email. Emails reminding users of the penalties(More)