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Antoni Bosch-Domenech, Jose Garcia-Montalvo, Rosemarie Nagel, Albert Satorra

Cited by*: 42 Downloads*: 14

"Beauty-contest is a game in which participants have to choose, typically, a number in [0,100], the winner being the person whose number is closest to a proportion of the average of all chosen numbers. We describe and analyze Beauty-contest experiments run in newspapers in UK, Spain, and Germany and find stable patterns of behavior across them, despite the uncontrollability of these experiments. These results are then compared with lab experiments involving undergraduates and game theorists as subjects, in what must be one of the largest empirical corroborations of interactive behavior ever tried. We claim that all observed behavior, across a wide variety of treatments and subject pools, can be interpreted as iterative reasoning. Level-1 reasoning, Level-2 reasoning and Level-3 reasoning are commonly observed in all the samples, while the equilibrium choice (Level-Maximum reasoning) is only prominently chosen by newspaper readers and theorists. The results show the empirical power of experiments run with large subject-pools, and open the door for more experimental work performed on the rich platform offered by newspapers and magazines."

Antoni Bosch-Domenech, Rosemarie Nagel, Juan V Sanchez-Andres

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Alzheimer patients in the early stage of the disease were asked to participate in the Dictator game, a game in which each subject has to decide how to allocate a certain amount of money between himself and another person. The game allows the experimenter to view the influence of social norms and preferences on the decision-making process. When the data from the experiment are compared with the results of an identical experiment involving two control groups with similar ages and social background, one group with Mild Cognitive Impairment patients, the other with healthy subjects, it appears that the results from the three groups are statistically undistinguishable. This is an indication that Stage I AD patients are as capable of making decisions involving social norms and preferences as any person of their age, and that whatever brain structures are affected by the disease, they do not include, at this stage, the neural basis of cooperation-enhancing social interactions.

Antoni Bosch-Domenech, Jose Garcia-Montalvo, Rosemarie Nagel, Albert Satorra

Cited by*: 0 Downloads*: 12

This paper develops a finite mixture distribution analysis of Beauty-Contest data obtained from diverse groups of experiments. ML estimation using the EM approach provides estimates for the means and variances of the component distributions, which are common to all the groups, and estimates of the mixing proportions, which are specific to each group. This estimation is performed without imposing constraints on the parameters of the composing distributions. The statistical analysis indicates that many individuals follow a common pattern of reasoning described as iterated best reply (degenerate), and shows that the proportions of people thinking at different levels of depth vary across groups.