Dynamics of Output Growth , Consumption and Physical Capital in Two-Sector Models of Endogenous Growth by

"Human experience, which is constantly contradicting theory, is the great test of truth." This paper reports experiments designed to study strategic sophistication, the extent to which behavior in games reflects attempts to predict others' decisions, taking their incentives into account. We studied subjects' initial responses to normal-form games with various patterns of iterated dominance and unique pure-strategy equilibria without dominance, using a computer interface that allowed them to search for hidden payoff information, while recording their searches. Monitoring subjects' information searches along with their decisions allows us to better understand how their decisions are determined, and subjects' deviations from the search patterns suggested by equilibrium analysis help to predict their deviations from equilibrium decisions. which made its facilities available for our experiments.

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