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6 important questions on Articles - McKelvey

Describe the centipide game

two players alternately get a chance to take the larger portion of a continually escalating pile of money. As soon as one person takes, the game ends with that player getting the larger portion of the pile, and the other player getting the smaller portion. Game theoretic equilibrium: first mover should take the large pile on the first round

Describe the reputation effect

believing that the other player is behaving like an altruist or not. Experienced subjects exhibit a pattern of cooperation until shortly before the end of the game, when they start to adopt non-cooperative behaviour.

Another result: there are differences between the earlier and later plays of the game, where players in the later games behave more

rational, since they gained more experience in the game.

If we look at individual level, there are several subjects who PASS at every opportunity they have. This shows

altruism, because an obvious way to rationalize their behaviour is to assume that they have a utility function that is increasing in the sum of both players, rather than a selfish utility function that only depends on that players’ own payoff.

The subject’s behaviour is

inconsistent with the use of a single pure strategy throughout all the games they played. Example: subject #6 in session #1 chooses PASS at the last node of the first game, but TAKES at the first opportunity a few games later. Rational play cannot account for some sequences of plays. A player might first be altruistic, but then becomes rational.

What is the subgame perfect Nash equilibrium in the Centipede Game as predicted by standard game theory?

The first player will ‘take’ in the first round

The question on the page originate from the summary of the following study material:

Games and Information An Introduction to Game Theory | 9781405136662 | Eric Rasmusen

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Articles - McKelvey

6 important questions on Articles - McKelvey

Describe the centipide game

Describe the reputation effect

Another result: there are differences between the earlier and later plays of the game, where players in the later games behave more

If we look at individual level, there are several subjects who PASS at every opportunity they have. This shows

The subject’s behaviour is

What is the subgame perfect Nash equilibrium in the Centipede Game as predicted by standard game theory?

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