The paper is organized as follows. The next section describes
the model. Section III collects some theoretical results. Section IV
reports estimation of the τ parameter from six classes of games.
Section V explores the “economic value” of C…Denote another player $-i$’s strategy by $s{-i}^j$, and player $i$’s payoffs from choosing $si^j$ when the other player chooses $s{-i}^j$ by $\pii(si^j, s{-i}^j)$. Given the $k$-step thinker’s beliefs, the expected payoff to a $k$-step thin…Another possibility is to assume that k-step players realize there are other k-step thinkers (g<sub>k</sub>(k) > 0). Self-awareness of this sort is a step away from the goal of creating a precise disequilibrium theory, because it imposes co…
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