Timothy Cason | Purdue University

Studies of strategic sophistication in experimental normal form games commonly assume that subjects’ beliefs are consistent with independent choice. This paper examines whether beliefs are consistent with correlated choice. Players play a sequence of simple 2x2 normal form games with distinct opponents and no feedback. Another set of players, called predictors, report a likelihood ranking over possible outcomes. A substantial proportion of the reported rankings are consistent with the predictors believing that the choice of actions in the 2x2 game are correlated. The extent of correlation over action profiles vary systematically between the type of games (i.e., prisoner’s dilemma, stag hunt, coordination, and strictly competitive) as well as the kind of payments within each type of game (i.e., high vs. low deviation payoffs and symmetric vs. asymmetric payoffs).

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