The Predominant Role of Signal Precision in Experimental Beauty Contests
2016 ◽
Vol 16
(1)
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pp. 267-301
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Keyword(s):
AbstractThe weight assigned to public information in Keynesian beauty contests depends on both the precision of signals and the degree of strategic complementarities. This experimental study shows that the response of subjects to changes in signal precision and the degree of strategic complementarities is qualitatively consistent with theoretical predictions, though quantitatively weaker. The weaker response of subjects to changes in the precision of signals, however, mainly drives the weight observed in the experiment, qualifying the role of strategic complementarities and overreaction in experimental beauty contests.
Keyword(s):
2000 ◽
Vol 75
(4)
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pp. 429-451
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