Higher-order beliefs in a Sequential Social Dilemma

Anujit Chakraborty and Evan Calford

No 356, Working Papers from University of California, Davis, Department of Economics

Abstract: Do experimental subjects have consistent first and higher-order beliefs about others? How does any inconsistency affect strategic decisions? We introduce a simple four-player sequential social dilemma where actions reveal first and higher-order beliefs. The unique sub-game perfect Nash equilibrium (SPNE) is observed less than 5% of the time, even though our diagnostic treatments show that a majority of our subjects are self-interested, higher-order rational and have accurate first-order beliefs. In our data, strategic play deviates substantially from Nash predictions because first-order and higher-order beliefs are inconsistent for most subjects. We construct and operationalize an epistemic model of belief hierarchies to estimate that less than 10% of subjects have consistent first and higher-order beliefs.

Date: 2023-03-22
New Economics Papers: this item is included in nep-exp and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://repec.dss.ucdavis.edu/files/Fx8UwGs6SG4rda ... fs_submit_to_IER.pdf (application/pdf)

Related works:
Working Paper: Higher-order Beliefs in a Sequential Social Dilemma (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cda:wpaper:356

Access Statistics for this paper

More papers in Working Papers from University of California, Davis, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Letters and Science IT Services Unit ().