Journal Article

Stated Beliefs and Play in Normal-Form Games

Miguel A. Costa-Gomes and Georg Weizsäcker

in The Review of Economic Studies

Published on behalf of Review of Economic Studies Ltd

Volume 75, issue 3, pages 729-762
Published in print July 2008 | ISSN: 0034-6527
Published online July 2008 | e-ISSN: 1467-937X | DOI: http://dx.doi.org/10.1111/j.1467-937X.2008.00498.x
Stated Beliefs and Play in Normal-Form Games

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  • Game Theory and Bargaining Theory
  • Information, Knowledge, and Uncertainy

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Using data on one-shot games, we investigate whether players' actions can be viewed as responses to underlying expectations about their opponent's behaviour. In our laboratory experiments, subjects play a set of 14 two-person 3×3 games and state beliefs about which actions they expect their opponents to play. The data sets from the two tasks are largely inconsistent. Rather, we find evidence that the subjects perceive the games differently when they (i) choose actions and (ii) state beliefs—their stated beliefs reveal deeper strategic thinking than their actions. On average, they fail to best respond to their own stated beliefs in almost half of the games. The inconsistency is confirmed by estimates of a unified statistical model that jointly uses the actions and the belief statements. There, we can control for decision noise and formulate a statistical test that rejects consistency. Effects of the belief elicitation procedure on subsequent actions are mostly insignificant.

Keywords: C70; D83

Journal Article.  17899 words.  Illustrated.

Subjects: Game Theory and Bargaining Theory ; Information, Knowledge, and Uncertainy

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