Brünner, Tobias (2020) Self-selection with non-equilibrium beliefs: Predicting behavior in a tournament experiment. Journal of Economic Behavior & Organization, 169 . pp. 389-396. ISSN 0167-2681
Full content URL: https://doi.org/10.1016/j.jebo.2019.11.028
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Item Type: | Article |
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Item Status: | Live Archive |
Abstract
In this study we use level-k thinking and a recently proposed model of non-equilibrium beliefs in dynamic games (PBNLK) to predict behavior in a tournament with self-selection. We find that the combination of level-k and PBNLK predicts both the population of types in the tournament, as well as the mean and variance of efforts better than Nash equilibrium, a static level-k model and other models of non-equilibrium beliefs. Our results show that non-equilibrium beliefs are an important determinant for the decision to compete in a tournament and the performance in that tournament. Moreover, a useful model of non-equilibrium beliefs should allow players to update their beliefs
during the course of the competition.
Keywords: | level-k thinking, NLK, Bayesian updating, Tournament, Experiment, Competition |
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Subjects: | L Social studies > L100 Economics L Social studies > L120 Microeconomics N Business and Administrative studies > N600 Human Resource Management |
Divisions: | Lincoln International Business School |
ID Code: | 38977 |
Deposited On: | 28 Nov 2019 11:16 |
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