The 11-20 Money Request Game: Evaluating the Upper Bound of k-Level Reasoning

We study experimentally (with monetary incentives) a two-player game which is ideal for investigating k-level reasoning. Each player requests an amount of money between 11 and 20 shekels. He receives the amount that he requests and if he requests exactly one shekel less than the other player, he receives an additional 20 shekels. We argue that the game can provide an "upper bound" for the depth of k-level reasoning in a population. We support this conjecture by studying several variations of the game which manipulate the attractiveness of the level-0 strategy and the monetary cost of undercutting the other player.

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