Stated beliefs versus inferred beliefs: A methodological inquiry and experimental test

If belief elicitation during repeated game play changes game play, using stated beliefs to evaluate and compare theories of strategic action is problematic. We experimentally verify that belief elicitation can alter paths of play in a repeated asymmetric matching pennies game. Belief elicitation improves the goodness of fit of structural models of belief learning, and the prior “inferred beliefs” implied by estimates of such structural models are both stronger and more realistic when beliefs are elicited than when they are not. These effects are confined to players who see strong payoff asymmetries between strategies. We conjecture that this occurs because both automatic, unconscious, evaluative processes and more effortful, conscious, deliberative processes can conflict, and that the latter are enhanced by belief elicitation. We also find that inferred beliefs (beliefs estimated from past observed actions of opponents) can be better predictors of observed actions than the “stated beliefs” resulting from belief elicitation. Draft: June 2007 JEL classification codes: C73, C92, D83