Bridging Level-K to Nash Equilibrium

• 成果类型: Article
• 署名作者: Levin, Dan; Zhang, Luyao
• 署名单位: University System of Ohio; Ohio State University; Duke Kunshan University
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/rest_a_00990
• 发表日期: 2022-11
• 页码: 1329-1340
• 关键词: egocentric bias; players models; guessing games; centipede game; normal-form; auctions; INFORMATION; reputation; BEHAVIOR; depth

摘要

We introduce NLK, a model that connects the Nash equilibrium (NE) and level-k. It allows a player in a game to believe that her opponent may be either less or as sophisticated as she is, a view supported in psychology. We apply NLK to data from five published papers on static, dynamic, and auction games. NLK provides different predictions from those of the NE and level-k; moreover, a simple version of NLK explains the experimental data better in many cases, with the same or fewer parameters. We discuss extensions to games with more than two players and heterogeneous beliefs.