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What is a Nash equilibrium of the ”Guess Half the Mean” Game? Explain why the experimental...

What is a Nash equilibrium of the ”Guess Half the Mean” Game? Explain why the

experimental results in class are different from the theoretical prediction.

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Answer #1

In guess half the mean game, the Nash equilibrium is for everyone to declare/play zero.

It is a Nash equilibrium because if everyone else is playing zero, the best response would be to play zero.

The experimental result is different because they are not economists and also Nash equilibrium strategy is not the optimum strategy when others are playing a different set of strategies. Thus, both the factors, the irrationality of the subjects as well as the different scenario plays the role.

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