Comparing Models of Strategic Thinking in

This paper compares the leading models of strategic thinking with subjects’ initial responses to Van Huyck et al.’s (1990, 1991; “VHBB”) coordination games. The data favor models in which players treat their partners’ decisions as correlated rather than independent. Among the equilibrium selection criteria we compare, payoff-dominant equilibrium fits better than risk-dominant equilibrium or a simple maximin model. Among the individualistic models we compare, level-k and cognitive hierarchy models perform best overall, usually fitting better than noisy introspection and logit quantal response equilibrium models. In VHBB’s games, however, payoffdominant equilibrium usually fits better than any individualistic model.