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Experimental Economics

, Volume 15, Issue 4, pp 622–640 | Cite as

Information and beliefs in a repeated normal-form game

  • David N. Danz
  • Dietmar Fehr
  • Dorothea Kübler
Article

Abstract

We study beliefs and actions in a repeated normal-form game. Using a level-k model of limited strategic reasoning and allowing for other-regarding preferences, we classify action and belief choices with regard to their strategic sophistication and study their development over time. In addition to a baseline treatment with common knowledge of the game structure, feedback about actions in the previous period and random matching, we run treatments (i) with fixed matching, (ii) without information about the other player’s payoffs, and (iii) without feedback about previous play. In all treatments with feedback, we observe more strategic play (increasing by 15 percent) and higher-level beliefs (increasing by 18 percent) over time. Without feedback, neither beliefs nor actions reach significantly higher levels of reasoning (with increases of 2 percentage points for actions and 6 percentage points for beliefs). The levels of reasoning reflected in actions and beliefs are highly consistent, but less so for types with lower levels of reasoning.

Keywords

Beliefs Level-k model Learning 

JEL Classification

C72 C92 D83 D84 

Supplementary material

10683_2012_9317_MOESM1_ESM.pdf (175 kb)
Appendix Sample Instructions (for FM) (PDF 175 kB)

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Copyright information

© Economic Science Association 2012

Authors and Affiliations

  • David N. Danz
    • 1
  • Dietmar Fehr
    • 1
  • Dorothea Kübler
    • 1
    • 2
  1. 1.Wissenschaftszentrum BerlinBerlinGermany
  2. 2.Technische Universität BerlinBerlinGermany

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