Bounded rationality in Keynesian beauty contests: a lesson for central bankers? by Mauersberger Felix, Nagel Rosemarie, Bühren Christoph

“…They introduce the reader to variations of the Keynesian Beauty Contest (Keynes, The general theory of employment, interest, and money, 1936), theoretically and experimentally, demonstrating systematic patterns of out-of-equilibrium behavior. …”
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Cognitive Hierarchy Theory and Two-Person Games by Carlos Gracia-Lázaro, Luis Mario Floría, Yamir Moreno

“…Cognitive hierarchy theory provides a framework to model the consequences of forecasting accuracy that has proven to fit data from certain types of game theory experiments, such as Keynesian beauty contests and entry games. Here, we focus on symmetric two-player-two-action games and establish an algorithm to find the players’ strategies according to the cognitive hierarchy approach. …”
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