Can you predict human behaviour?
Given a range of integers from 0 to 100, what would the whole number closest to 2/3 of the average of all numbers guessed be? For example, if the average of all guesses is 60, the correct guess will be 40. The game is played under conditions known to game theorists as "common knowledge:" every player has the same information- they also know that everyone else does too. Lucas Husted explains.
Answer the following questions:
While k-level theory can explain more of the real world, it is also a broad concept that can rationalize many outcomes of a game like the 2/3 game. Do you think this takes away from the value of thinking of the world in this way?
Can you think of another way to explain what people are doing in the 2/3 the average game? Does this make you less willing to ascribe all you are seeing to k-level thinking?
What if instead of all of your opponents playing the same level strategy in the 2/3 game, you have a mixture of types playing levels 0 through 4 based on their experience with game theory. How would you play in such a game?
Record a 1 minute video recommending this pill.