Article

A Survey of Psychological Games: Theoretical Findings and Experimental Evidence

LERNA, University of Toulouse, Working Papers 01/2008;
Source: RePEc

ABSTRACT I modify the uniform-price auction rules in allowing the seller to ration bidders. This allows me to provide a strategic foundation for underpricing when the seller has an interest in ownership dispersion. Moreover, many of the so-called "collusive-seeming" equilibria disappear.

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    ABSTRACT: We use response time (RT) and behavioral data from two different but related games to test the hypothesis that individuals use introspection when confronted with a new strategic situation. Our results confirm that the need to reflect about the possible behavior of the other player (interactive thought) has an important role in the mental processes present in strategic interactions. We also find that players with longer response times have distributions of behavior that are more dispersed than for faster players. This suggests that the longest RTs across games correspond to thought dedicated to the resolution of moral dilemmas and not to guessing the likely behavior of other players in order to maximize own payoff.
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