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The α-beauty contest: Choosing numbers, thinking intervals

Enrico De Giorgi, Stefan Reimann
2008 Games and Economic Behavior  
The predictions of our model are in good quantitative agreement with real data for various α-beauty contest games.  ...  The 1-shot α-beauty contest is a strategic game under bounded rationality conditions, where equilibrium is approached if the game is played iteratively sufficiently many times.  ...  A reasonable model of the α-Beauty Contest must also explain the path towards equilibrium.  ... 
doi:10.1016/j.geb.2008.02.008 fatcat:z2moosmfqfg3zai3gidw5elopa

Price of Privacy in the Keynesian Beauty Contest [article]

Hadi Elzayn, Zachary Schutzman
2019 arXiv   pre-print
The Keynesian Beauty Contest is a classical game in which strategic agents seek to both accurately guess the true state of the world as well as the average action of all agents.  ...  of an aggregator whose statistical estimate of the true state of the world is of lower precision due to the agents adding random noise to their actions.  ...  We would additionally like to thank the anonymous reviewers for their helpful feedback.  ... 
arXiv:1905.00844v1 fatcat:2g4bpvveafaqngwilfiu5rbz7u

Level-K Reasoning in a Generalized Beauty Contest

Dmitry A. Shapiro, Xianwen Shi, Artie Zillante
2011 Social Science Research Network  
We study how the predictive power of level-k models changes as we perturb the classical beauty contest setting along two dimensions: the strength of the coordination motive and the information symmetry  ...  However, the predictive power of level-k models is significantly weakened when private information is introduced or the importance of the coordination motive is decreased.  ...  While level-k thinking is not particularly unique to the beauty contest (see e.g.  ... 
doi:10.2139/ssrn.1495886 fatcat:yilrxdb33vatbfkj26g3wpdrva

Keynesian Beauty Contest, Accounting Disclosure, and Market Efficiency

Pingyang Gao
2007 Social Science Research Network  
This paper examines the market efficiency consequences of accounting disclosure in the context of stock markets as a Keynesian beauty contest, an influential metaphor originally proposed by Keynes (1936  ...  Hence, as a main source of public information, accounting disclosure enhances market efficiency, and transparency should not be compromised on grounds of the Keynesian-beauty-contest effect. * I am grateful  ...  However, given the definition of information, the firm's disclosure policy can be characterized by choosing a parameter α from the interval [0, αmax].  ... 
doi:10.2139/ssrn.959060 fatcat:dbpxmwex3zfzzp2cwrtzuy43te

Keynesian Beauty Contest, Accounting Disclosure, and Market Efficiency

PINGYANG GAO
2008 Journal of Accounting Research  
This paper examines the market efficiency consequences of accounting disclosure in the context of stock markets as a Keynesian beauty contest, an influential metaphor originally proposed by Keynes (1936  ...  Hence, as a main source of public information, accounting disclosure enhances market efficiency, and transparency should not be compromised on grounds of the Keynesian-beauty-contest effect. * I am grateful  ...  However, given the definition of information, the firm's disclosure policy can be characterized by choosing a parameter α from the interval [0, αmax].  ... 
doi:10.1111/j.1475-679x.2008.00295.x fatcat:gi7sfjkljre2hauvbmykdnaw4u

Exploring a Dualism of Human Rationality: Experimental Study of a Cheating Contest Game

Bodo Herzog, Stefanie Schnee
2022 International Journal of Environmental Research and Public Health  
Indeed, rationality is required for environmental action towards net-zero emissions or public health interventions during the SARS-CoV-2 pandemic.  ...  Yet, little is known about the elements of rationality. This paper explores a dualism of rationality comprised of optimality and consistency.  ...  Data Availability Statement: Data can be found in the paper and appendix and upon request from authors. Acknowledgments: The anonymous referees for their valuable comments.  ... 
doi:10.3390/ijerph19137675 pmid:35805334 pmcid:PMC9265569 fatcat:c7li2bgqnfhitdkwngncsaw3km

Beauty Contests and Iterated Expectations in Asset Markets

Franklin Allen, Stephen Morris, Hyun Song Shin
2006 The Review of financial studies  
(noisy) public information. * This is a much revised version of the paper with the longer title "Beauty Contests, Bubbles and Iterated Expectations in Asset Markets".  ...  Thus (iterating this relationship) the date 1 price equals the date 1 average expectation of the date 2 average expectation of the date 3 price.  ...  It is not a case of choosing those which, to the best of one's judgement, are really the prettiest, nor even those which average opinion genuinely thinks the prettiest.  ... 
doi:10.1093/rfs/hhj036 fatcat:5hfhciip5vez7hn2jg56h7cuzq

Sophisticated Bidders in Beauty-Contest Auctions

Stefano Galavotti, Luigi Moretti, Paola Valbonesi
2018 American Economic Journal: Microeconomics  
We study bidding behavior by firms in beauty-contest auctions, i.e. auctions in which the winning bid is the one which gets closest to some function (average) of all submitted bids.  ...  Using a dataset on public procurement beauty-contest auctions, we show that firms' observed bidding behavior departs from equilibrium and can be predicted by a sophistication index, which captures the  ...  These auctions resemble beauty-contest games in that the winning bid is the one which gets closest to some function (average) of all submitted bids.  ... 
doi:10.1257/mic.20150240 fatcat:r7pvt24etnf7jc7eczsjxa2s5y

Bounded rationality in Keynesian beauty contests: a lesson for central bankers?

Felix Mauersberger, Rosemarie Nagel, Christoph Bühren
2020 Economics : the Open-Access, Open-Assessment e-Journal  
They introduce the reader to variations of the Keynesian Beauty Contest (Keynes, The general theory of employment, interest, and money, 1936), theoretically and experimentally, demonstrating systematic  ...  This gap led to a series of recent developments of a behavioral microfoundation of macroeconomics combined with the underlying experimental and behavioral Beauty Contest (BC) literature, which the authors  ...  Nagel also acknowledges the grants PGC2018-098949-B-I00 from the Ministry of Education Madrid, and the travel grant Salvador de Madariaga 2019.  ... 
doi:10.5018/economics-ejournal.ja.2020-16 fatcat:dxustikigzhydi5dbaygpdtl4u

The Beauty Contest and Short-Term Trading

Giovanni Cespa, Xavier Vives
2014 Social Science Research Network  
Short-termism need not breed informational price inefficiency even when generating Beauty Contests.  ...  Informed investors engage in "retrospective" learning to reassess inferences (about fundamentals) made during the trading game's early stages.  ...  It is not a case of choosing those which, to the best of one's judgment, are really the prettiest, nor even those which average opinion genuinely thinks the prettiest.  ... 
doi:10.2139/ssrn.2697645 fatcat:66r4krzbqnadfo4m43q4zvolyy

The Beauty Contest and Short-Term Trading

GIOVANNI CESPA, XAVIER VIVES
2015 Journal of Finance  
Short-termism need not breed informational price inefficiency even when generating Beauty Contests.  ...  However, this effect cannot be distinguished from the buying pressure of liquidity traders, which also has the effect of increasing E[v|p]. 16 As before, we assume (w.l.o.g.) that the nonrandom endowment  ...  It is not a case of choosing those which, to the best of one's judgment, are really the prettiest, nor even those which average opinion genuinely thinks the prettiest.  ... 
doi:10.1111/jofi.12279 fatcat:uibiwxedb5ecfczby7dgrrx54u

Contest Theory and its Applications in Sports

Helmut M. Dietl, Egon P. Franck, Martin Grossmann, Markus Lang
2009 Social Science Research Network  
In the first part, we present the traditional Tullock contest and explain some basic properties of the equilibrium.  ...  We will then extend this static contest to a two-period model in order to analyze dynamic aspects of contests. In the second part, we will present applications of contest theory in sports.  ...  The equilibrium investments for club 1, 2 i = are then given by 2 2 or (ii) the revenue sharing parameterα is within the interval ( 2 1 2 3 4 4 ( , ] , γ γ γ γ α α  ... 
doi:10.2139/ssrn.1465256 fatcat:mrwmqxr2pjbtbpkh3h5ofe5so4

Structural stochastic volatility in asset pricing dynamics: Estimation and model contest

Reiner Franke, Frank Westerhoff
2012 Journal of Economic Dynamics and Control  
within their empirical confidence intervals.  ...  The model contest along these lines reveals a strong role for a (tamed) herding component.  ...  In addition, β = 1 is common to the DCA versions and ν = 0.05 to the TPA versions. φ χ η α w α o α n α p σ f σ c With these conventions, we choose an arbitrary random number seed for the simulation of  ... 
doi:10.1016/j.jedc.2011.10.004 fatcat:a6mzofzql5hlhgs2gbmbw67n4y

Markets for Ideas: Prize Structure, Entry Limits, and the Design of Ideation Contests

Pavel Kireyev
2016 Social Science Research Network  
I develop an empirical model of idea generation (ideation) contests and investigate the impact of the number of prizes, prize amount, and submission limit on participation and quality outcomes using data  ...  Contests are a popular mechanism for the procurement of innovation.  ...  Then, the resulting cost intervals ν Ls it , ν U s it will take into account that participants had incomplete information when choosing their actions.  ... 
doi:10.2139/ssrn.2780503 fatcat:ab4x5do73fgnfph27cuhnnuvna

Choices in the 11–20 Game: The Role of Risk Aversion

King Li, Kang Rong
2018 Games  
Arad and Rubinstein (2012, AER) proposed the 11–20 money request game as an alternative to the P beauty contest game for measuring the depth of thinking.  ...  In this paper, we show theoretically that in the Nash equilibrium of the 11–20 game players are more likely to choose high numbers if they are risk-averse rather than risk neutral.  ...  (A) The Relative Frequencies of the Chosen Numbers in the P-beauty Contest Game; (B) The Depth of Thinking in the P Beauty Contest Game. Games 2018, 9, The De pth of Thinking in the 11-20 Game .  ... 
doi:10.3390/g9030053 fatcat:ngg4ekxhxfbaplgmgt2vbcjomu
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