Depth of reasoning and information revelation: An experiment on the distribution of k-Levels

Volker Benndorf, Dorothea Kübler, Hans-Theo Normann, 2017,
International Game Theory Review, 19 (4)

The level-k model is a workhorse in behavioral game theory. For comparisons across experiments and predictions in future studies, it is crucial to assess the empirical distribution of k-levels. We present a revelation game suitable for this purpose. In a labor market context, workers can choose to reveal their productivity at a cost, and players’ strategies reveal their level of reasoning in terms of a k-level. We find that the most frequently observed reasoning levels are k=2 and k=3. In our game roughly 30% of the players are k≤1 and 25% are k≥4. We compare our results to other experiments that identify level-k distribution, foremost to the money request (or 11–20) game. Despite various differences to the 11–20 game, our revelation game suggests a very similar distribution of level-k types.