Game theory is usually difficult to test in the field because predictions
typically depend sensitively on features that are not controlled or observed. We conduct one such test using both laboratory and field data from the Swedish lowest unique positive integer (LUPI) game. In this game, players pick positive integers and whoever chooses the lowest unique number wins. Equilibrium predictions are
derived assuming Poisson distributed population uncertainty. The field and lab data show similar patterns. Despite various deviations from equilibrium, there is a surprising degree of convergence toward equilibrium. Some deviations can be rationalized by a cognitive hierarchy model. (JEL C70, C93, D44, H27)
Östling, Robert, Joseph Tao-yi Wang, Eileen Y. Chou, and Colin F. Camerer.
"Testing Game Theory in the Field: Swedish LUPI Lottery Games."
American Economic Journal: Microeconomics,
Game Theory and Bargaining Theory: General
Taxation, Subsidies, and Revenues: Other Sources of Revenue