Welcome to my research page!
Papers
Published Papers
- Extreme (and Non-Extreme) Punishments in Sender-Receiver Games with Judicial Error: An Experimental Investigation (with Joseph Tao-yi Wang)
Frontiers in Behavioral Economics, 2023Abstract
In many real world situations, decision-makers have the opportunity to punish informed senders for their biased recommendations, while lie-detection is far from perfect. Hence, we conduct an experiment which incorporates ex post punishment and monitoring uncertainty into the discrete sender-receiver game first introduced by Crawford and Sobel, where a knowledgeable sender sends a cheap-talk message to a receiver who determines a policy action. After taking this action, the receiver observes a noisy signal of the true state and can impose a costly punishment on the sender. We vary the strength of punishment from mild (nominal), strong (deterrent) to extreme (potential of losing everything), and vary receiver's signal uncertainty when punishment is extreme. We find that receivers punish less as the strength of punishment increases, which suggests people care more about wrongly punishing innocent senders harsher than not being able to hand liars harsher punishments they deserve. More importantly, the opportunity of punishment encourages receivers to follow senders more and thus improves overall information transmission and utilization, even though senders need not exaggerate less.
Working Papers
- Measuring Higher-Order Rationality with Belief Control (with Wei James Chen and Po-Hsuan Lin) minor revision at Experimental Economics
arXiv:2309.07427, Updated 09/14/2023, [Poster] [Experimental Instructions]Abstract
Determining an individual's strategic reasoning capability based solely on choice data is a complex task. This complexity arises because sophisticated players might have non-equilibrium beliefs about others, leading to non-equilibrium actions. In our study, we pair human participants with computer players known to be fully rational. This use of robot players allows us to disentangle limited reasoning capacity from belief formation and social biases. Our results show that, when paired with robots, subjects consistently demonstrate higher levels of rationality and maintain stable rationality levels across different games compared to when paired with humans. This suggests that strategic reasoning might indeed be a consistent trait in individuals. Furthermore, the identified rationality limits could serve as a measure for evaluating an individual's strategic capacity when their beliefs about others are adequately controlled.
- A Note on Cursed Sequential Equilibrium and Sequential Cursed Equilibrium (with Po-Hsuan Lin and Thomas R. Palfrey)
Caltech Social Science Working Paper #1467, Updated 04/11/2023Abstract
In this short note, we compare the cursed sequential equilibrium (CSE) by Fong et al. (2023) and the sequential cursed equilibrium (SCE) by Cohen and Li (2023). We identify eight main differences between CSE and SCE with respect to the following features:
(1) the family of applicable games,
(2) the number of free parameters,
(3) the belief updating process,
(4) the treatment of public histories,
(5) effects in games of complete information,
(6) violations of subgame perfection and sequential rationality,
(7) re-labeling of actions, and
(8) effects in one-stage simultaneous-move games. - Cursed Sequential Equilibrium (with Po-Hsuan Lin and Thomas R. Palfrey) revision requested at American Economic Review
Caltech Social Science Working Paper #1465, Updated 04/11/2023Abstract
This paper develops a framework to extend the strategic form analysis of cursed equilibrium (CE) developed by Eyster and Rabin (2005) to multi-stage games. The approach uses behavioral strategies rather than normal form mixed strategies, and imposes sequential rationality. We define cursed sequential equilibrium (CSE) and compare it to sequential equilibrium and standard normal-form CE. We provide a general characterization of CSE and establish its properties. We apply CSE to five applications in economics and political science. These applications illustrate a wide range of differences between CSE and Bayesian Nash equilibrium or CE: in signaling games; games with preplay communication; reputation building; sequential voting; and the dirty faces game where higher order beliefs play a key role. A common theme in several of these applications is showing how and why CSE implies systematically different behavior than Bayesian Nash equilibrium in dynamic games of incomplete information with private values, while CE coincides with Bayesian Nash equilibrium for such games.