Edgar Allan Poe's riddle: Framing effects in repeated matching pennies games

Kfir Eliaz, Ariel Rubinstein

    Research output: Contribution to journalArticlepeer-review

    Abstract

    Framing effects have a significant influence on the finitely repeated matching pennies game. The combination of being labelled "a guesser," and having the objective of matching the opponent's action, appears to be advantageous. We find that being a player who aims to match the opponent's action is advantageous irrespective of whether the player moves first or second. We examine alternative explanations for our results and relate them to Edgar Allan Poe's "The Purloined Letter." We propose a behavioral model which generates the observed asymmetry in the players' performance.

    Original languageEnglish (US)
    Pages (from-to)88-99
    Number of pages12
    JournalGames and Economic Behavior
    Volume71
    Issue number1
    DOIs
    StatePublished - Jan 2011

    Keywords

    • Edgar Allan Poe
    • Even and odd
    • Framing effects
    • Matching pennies

    ASJC Scopus subject areas

    • Finance
    • Economics and Econometrics

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