Two Level Recursive Reasoning by Humans Playing Sequential Fixed-Sum Games

Recursive reasoning of the form what do I think that you think that I think (and so on) arises often while acting rationally in multiagent settings. Previous investigations indicate that humans do not tend to ascribe recursive thinking to others. Several multiagent decisionmaking frameworks such as RMM, I-POMDP and the theory of mind model recursive reasoning as integral to an agent’s rational choice. Real-world application settings for multiagent decision making tend to be mixed involving humans and human-controlled agents. We investigate recursive reasoning exhibited by humans during strategic decision making. In a large experiment involving 162 participants, we studied the level of recursive reasoning generally displayed by humans while playing a sequential fixedsum, two-player game. Our results show that subjects experiencing a strategic game made more competitive with fixed-sum payoffs and tangible incentives predominantly attributed first-level recursive thinking to opponents. They acted using second level of reasoning exceeding levels of reasoning observed previously.