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We acknowledge support of National Science Foundation Grant No. SBR-9223701 to the California Institute of Technology and the support of the JPL-Caltech supercomputer project. We thank Barry O'Neill, Richard Boebel, Jack Ochs and Amnon Rapoport for sharing their data. We acknowledge valuable discussions with Mahmoud El-Gamal and Mark Fey, helpful comments(More)
This paper reports the results of a private-values auction experiment in which expected costs of deviating from the Nash equilibrium bidding function are asymmetric, with the implication that upward deviations will be more likely in one treatment than in the other. Overbidding is observed in both treatments, but is more prevalent in the treatment where the(More)
We explore an equilibrium model of games where behavior is given by logit response functions, but payoff responsiveness and beliefs about others' responsiveness are heterogeneous. We study two substantively different ways of extending quantal response equilibrium (QRE) to this setting: (1) Heterogeneus QRE, where players share identical correct beliefs(More)
This paper examines competition in the standard one-dimensional Downsian model of two-candidate elections, but where one candidate (A) enjoys an advantage over the other candidate (D). Voters' preferences are Euclidean, but any voter will vote for candidate A over candidate D unless D is closer to her ideal point by some fixed distance $. The location of(More)
In this paper we investigate the role of social preferences and beliefs for voluntary cooperation. Numerous public goods experiments have shown that many people contribute more to the public good than pure self-interest can easily explain. An equally important observation, however , is that free riding increases in repeatedly played public goods experiments(More)
The structural Quantal Response Equilibrium (QRE) generalizes the Nash equilibrium by augmenting payoffs with random elements that are not removed in some limit. This approach has been widely used both as a theoretical framework to study comparative statics of games and as an econometric framework to analyze experimental and field data. The framework of(More)
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)