Consistent depth of reasoning in level-k models

David J. Cooper, Enrique Fatas, Antonio J. Morales, Shi Qi

Research output: Contribution to journalArticlepeer-review


Level-k models often assume that individuals employ a  xed depth of reasoning across di erent games. We study this assumption by having subjects make choices in  ve classes of games chosen to identify inconsistent depth of reasoning. We demonstrate that depth of reasoning is pervasively inconsistent, changing both within and between classes of games. We show that this cannot easily be explained by factors such as subject confusion, changing beliefs about others' depth of reasoning, stochastic choice, model misspecification, changing incentives, or low cognitive ability. We develop a simple model incorporating ambiguity aversion that predicts inconsistent depth of reasoning.
Original languageEnglish
JournalAmerican Economic Journal: Microeconomics
Publication statusAccepted/In press - 14 Aug 2023

Cite this