A Cognitive Hierarchy Model of Behavior in Endogenous Timing Games

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Report: a report published by a school or other institution, usually numbered within a series.
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Working paper: Working papers contain results presented by the author. Working papers aim to stimulate discussions between scientists with interested parties, they can also be the basis to publish articles in specialized journals
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Title
A Cognitive Hierarchy Model of Behavior in Endogenous Timing Games
Author(s)
Santos Pinto L., Carvalho D.
Institution details
Université de Lausanne - HEC - DEEP
Issued date
01/2010
Number
10.06
Genre
Cahiers de recherches économiques
Language
english
Number of pages
48
Abstract
This paper applies the cognitive hierarchy model of Camerer, Ho and Chong (2004) to the action commitment game of Hamilton and Slutsky (1990). The model generates the heterogeneity of behavior reported in Huck, Müeller and Normann (2002). The model predicts the spike in the leadership quantity in the first period as well as the spike in the Cournot quantity in the second period. The model predicts delay, a feature that cannot be explained by social preferences. The also model predicts very well the percentage of Stackelberg outcomes, double leadership outcomes, and Stackelberg leaders punished by followers. Notwithstanding, the model produces low first period movement and is unable to generate sufficient percentages of sequential play of Cournot quantities and collusive market outcomes.
Create date
01/12/2008 22:52
Last modification date
20/08/2019 16:47
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