Econometrica: Sep 2015, Volume 83, Issue 5

Identifying Higher-Order Rationality

https://doi.org/10.3982/ECTA11983
p. 2065-2079

Terri Kneeland

Strategic choice data from a carefully chosen set of ring‐network games are used to obtain individual‐level estimates of higher‐order rationality. The experimental design exploits a natural exclusion restriction that is considerably weaker than the assumptions underlying alternative designs in the literature. In our data set, 93 percent of subjects are rational, 71 percent are rational and believe others are rational, 44 percent are rational and hold second‐order beliefs that others are rational, and 22 percent are rational and hold at least third‐order beliefs that others are rational.

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Supplemental Material

Supplement to "Identifying Higher-Order Rationality"

This appendix details the experimental protocols used in running the experiment.  This includes the instructions, the quiz, and a screenshot of an example game.  This file also contains the experimental data which includes the actions played by each subject in the 8 games, the treatment, and their classified order of rationality.

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