Revealing the depth of reasoning in p-beauty contest games

The aim of this study is to evaluate the impact of information on levels of reasoning on individuals' choices in p-beauty contest games. In the baseline design, subjects received information only on the average and target values from the previous period. In the alternative design, the winner(s) explained in a short message (30 words maximum) what reasoning he/she applied in selecting the target value and then stopped playing. The winner's message, the winning number, the target and average values were then displayed on all computer screens. The results show that non-winning players imitate the level of rationality of winners, and a significant proportion of the population adopt strategies which are best responses to other imitators' behaviour rather than to the average level of rationality. Both the imitative strategies and the best responses to the imitative strategies stimulate a strong acceleration of the learning process