Working Paper 737

Finite mixture analysis of beauty-contest data using generalised beta distributions
Antoni Bosch-Domènech, José Garcia Montalvo, Rosemarie Nagel i Albert Satorra
Gener 2004 (Revisió: Maig 2010)
This paper introduces a mixture model based on the beta distribution, without preestablished means and variances, to analyze a large set of Beauty-Contest data obtained from diverse groups of experiments (Bosch-Domenech et al. 2002). This model gives a better t of the experimental data, and more precision to the hypothesis that a large proportion of individuals follow a common pattern of reasoning, described as iterated best reply (degenerate), than mixture models based on the normal distribution. The analysis shows that the means of the distributions across the groups of experiments are pretty stable, while the proportions of choices at di erent levels of reasoning vary across groups.
Paraules clau:
Keywords: Beauty-Contest experiments, decision theory, reasoning hierarchy, finite mixture distribution, beta distribution, EM algorithm.
Codis JEL:
Àrea de Recerca:
Economia Experimental i del Comportament
Publicat a:
Experimental Economics, Vol. 13(4), 461-475, 2010.

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