Title:
Cognitive Hierarchies in Extensive Form Games
Cognitive Hierarchies in Extensive Form Games
Time:
04/30/2022 01:00 PM PDT
04/30/2022 02:00 PM MDT
04/30/2022 03:00 PM CDT
04/30/2022 04:00 PM EDT
05/01/2022 07:00 AM BST
05/01/2022 10:00 PM CEST
05/01/2022 04:00 AM Taiwan
04/30/2022 01:00 PM PDT
04/30/2022 02:00 PM MDT
04/30/2022 03:00 PM CDT
04/30/2022 04:00 PM EDT
05/01/2022 07:00 AM BST
05/01/2022 10:00 PM CEST
05/01/2022 04:00 AM Taiwan
Keywords:
Economics, Behavioral Game Theory, Experimental Economics, Cognitive Hierarchy, Extensive Form Games, Learning, Centipede Game
Economics, Behavioral Game Theory, Experimental Economics, Cognitive Hierarchy, Extensive Form Games, Learning, Centipede Game
Abstract:
The cognitive hierarchy (CH) approach posits that players in a game are heterogeneous with respect to levels of strategic sophistication. A level-k player believes all other players in the game have lower levels of sophistication distributed from 0 to k-1, and these beliefs correspond to the truncated distribution of a “true” distribution of levels. We extend the CH framework to extensive form games, where these initial beliefs over lower levels are updated as the history of play in the game unfolds, providing information to players about other players’ levels of sophistication. For a class of centipede games with a linearly increasing pie, we fully characterize the dynamic CH solution and show that it leads to the game terminating earlier than in the static CH solution for the centipede game in reduced normal form.
The cognitive hierarchy (CH) approach posits that players in a game are heterogeneous with respect to levels of strategic sophistication. A level-k player believes all other players in the game have lower levels of sophistication distributed from 0 to k-1, and these beliefs correspond to the truncated distribution of a “true” distribution of levels. We extend the CH framework to extensive form games, where these initial beliefs over lower levels are updated as the history of play in the game unfolds, providing information to players about other players’ levels of sophistication. For a class of centipede games with a linearly increasing pie, we fully characterize the dynamic CH solution and show that it leads to the game terminating earlier than in the static CH solution for the centipede game in reduced normal form.
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