Field Centipedes

We conduct a field experiment in which highly-ranked chess players play the centipede game in a natural setting. This game represents one of the main paradoxes of backward induction. In the experiment two players alternately are faced with the decision of either taking an exponentially growing pile of money and ending the game, or letting the other player make the decision. The player who decides to stop the game takes the larger portion of the pile, and the other player gets the remaining amount. All standard equilibrium concepts dictate that the player who decides first must stop the game immediately. There is vast experimental evidence, however, that this rarely occurs. Contrary to this evidence our results show that 69% of chess players stop the game immediately. When we restrict attention to chess Grandmasters this percentage escalates to 100%. We also conduct standard laboratory experiments where college students and chess players play ten repetitions of the game. We find that chess players playing versus other chess players rapidly converge to the equilibrium outcome, whereas students playing versus other students systematically depart from it. However, when students play against chess players the occurrence of the backward induction outcome increases tenfold.Rationality, centipede game, experiments, chess players.

The risk of divergence

We present infinite extensive strategy profiles with perfect information and we show that replacing finite by infinite changes the notions and the reasoning tools. The presentation uses a formalism recently developed by logicians and computer science theoreticians, called coinduction. This builds a bridge between economic game theory and the most recent advance in theoretical computer science and logic. The key result is that rational agents may have strategy leading to divergence .Comment: 3rd International Workshop on Strategic Reasoning, Dec 2015, Oxford, United Kingdom. 201

Are Groups more Rational than Individuals? A Review of Interactive Decision Making in Groups

Many decisions are interactive; the outcome of one party depends not only on its decisions or on acts of nature but also on the decisions of others. In the present article, we review the literature on decision making made by groups of the past 25 years. Researchers have compared the strategic behavior of groups and individuals in many games: prisoner’s dilemma, dictator, ultimatum, trust, centipede and principal-agent games, among others. Our review suggests that results are quite consistent in revealing that groups behave closer to the game-theoretical assumption of rationality and selfishness than individuals. We conclude by discussing future research avenues in this area.group decision making, interactive decision making, rationality, discontinuity effect

On the Evolution of Preferences

A common feature of the literature on the evolution of preferences is that evolution favors nonmaterialistic preferences only if preference types are observable at least to some degree. We argue that this result is due to the assumption that in each state of the evolutionary dynamics some Bayesian Nash equilibrium is played. We show that under unobservability of preference types, conditional on selecting some self-confirming equilibrium as a rule for mapping preference into behavior, non-selfish preferences may be evolutionarily successful.evolution of preferences, altruism, learning, self-confirming equilibrium