Cognitive hierarchies and the centipede game

Arbeitspapier

In the present work, I adopt the cognitive hierarchy approach to analyze the centipede game. To this end, I present and study an extensive-form version of Camerer et al.'s (2004) original normal-form model. The resulting predictions are evaluated empirically using laboratory data borrowed from a previously published experiment. The paper features two main contributions. First, it presents a parsimonious model that can, in principle, be generalized to any two-person extensive-form game of perfect information. Secondly, it demonstrates that in the centipede game the cognitive hierarchy approach leads to predictions which are not fully backwardly inductive and that can help to explain some key feature of the experimental data.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SSE/EFI Working Paper Series in Economics and Finance ; No. 723

Classification and Topics

• Classification: Wirtschaft ; Noncooperative Games ; Design of Experiments: Laboratory, Group Behavior ; Criteria for Decision-Making under Risk and Uncertainty
• Subject: centipede game ; cognitive hierarchy ; paradox backward induction ; experimental data analysis ; Normalformspiel ; Entscheidung bei Unsicherheit ; Verhaltensökonomik ; Spieltheorie ; Test

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bottero, Margherita
• Event: Veröffentlichung
• (who): Stockholm School of Economics, The Economic Research Institute (EFI)
• (where): Stockholm
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/56237
• Last update: 10.03.2025, 11:42 AM CET