ABSTRACT. We examine whether the "Level-k" model of strategic behavior generates reliable cross-game predictions at the individual level. We find no correlation in subjects' estimated levels of reasoning across two families of games. Furthermore, estimating a higher level for Ann than Bob in one family of games does not predict their ranking in the other. Direct tests of strategic reasoning generally do not predict estimated levels. Within families of games, we find that levels are fairly consistent within one family, but not the other. Our results suggest that the use of Level-k reasoning varies by game, making prediction difficult.

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We study auctions with resale based on Hafalir and Krishna's (2008) model.As predicted, weak bidders bid more with resale than without, so that average auction prices tend to increase. When the equilibrium calls for weak types to bid higher than their values with resale they do, but not nearly as much as the theory predicts. In other treatments outcomes are much closer to the risk neutral Nash model's predictions. Bid distributions for weak and strong types are more similar with resale than without, in line with the theory.

This is the accepted version of the paper.This version of the publication may differ from the final published version. Abstract Bidding one's value in a second-price, private-value auction is a weakly dominant solution (Vickrey, 1961), but repeated experimental studies find more overbidding than underbidding. We propose a model of optimistically irrational bidders who understand that there are possible gains and losses associated with higher bids but who may overestimate the additional probability of winning and/or underestimate the potential losses when bidding above value. These bidders may fail to discover the dominant strategy-despite the fact that the dominant strategy only requires rationality from bidders-but respond in a common sense way to out-of-equilibrium outcomes. By varying the monetary consequences of losing money in experimental auctions we observe more overbidding when the cost to losing money is low, and less overbidding when the cost is high. Our findings lend themselves to models in which less than fully rational bidders respond systematically to out-of-equilibrium incentives, and we find that our model better fits the effects of our manipulations than most of the existing models we consider. Permanent repository linkJEL classification: C92, D44, D82

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We experimentally investigate the Jackson-Moselle (2002) equilibrium. There will be a brief discussion of these results in Section IV where they help shape our understanding of the main treatment outcomes. Readers with particular interests in legislative bargaining models of the sort studied here are encouraged to read the appendix. (3) There is significant proposer power, but it is typically far from the level predicted under the stationary subgame perfect equilibrium (SSPE) prediction. I. Previous Research on MultilateralClosely related to (3) is that allocations with proposer power at, or near, the level predicted under the SSPE would be voted down with near certainty. using public goods to obtain willing coalition partners. Further, in the mixed region where both public and private goods are provided, as the relative value of public good decreases, the model predicts, somewhat counter intuitively, that a larger budget share will be allocated to the public good. Fréchette, Kagel and Morelli (2012) show that the experimental data are largely consistent with this first prediction, as within the mixed region allocations converge toward private goods being provided exclusively to the proposer. However, the public good's share of the budget decreases as the value of the public good decreases, contrary to the model's prediction. Depending on the proposer's type, either private goods or public goods will be used to secure legislative compromise, and to form a minimum winning coalition, with both of these outcomes observed in the data. Several unpredicted results are reported as well, including clear breakdowns of the stationarity assumption when private good preferring types propose to take too much for themselves, as they get significantly smaller payoffs following rejection of their proposed allocations.In the Volden-Wiseman (VM) version of the BF legislative bargaining model pork and public goods are funded from a common budget with the model focusing on the tradeoffs in the budget allocation process between public and private goods. The public component of the JM model consists of either a public policy proposal with an ideological component (e.g., limits on abortion rights or gay marriage), which the VM model is not equipped to deal with, or a proposal to fund the public good as in the VM model. In terms of funding levels for the public 5 Battaglini et al. (in press) investigate a dynamic legislative bargaining model with durable public goods in which all players have the same utility function which is linear in the private good with an additively separable concave utility function for the public good.good, funds for private goods are exogenous in the JM model, so one can think of the trade-off in the budget process as between funding a given public good and funding other public goods, or funding a given public good but one that also has local benefits (e.g., the location of a military base has additional economic benefits largely confined to the legislative district in which it is located). The downside ...

Timely, accurate epidemic figures are necessary for informed policy. In the Covid-19 pandemic, mismeasurement can lead to tremendous waste, in health or economic output. 'Random' testing is commonly used to estimate virus prevalence, reporting daily positivity rates. However, since testing is necessarily voluntary, all 'random' tests done in the field suffer from selection bias. This bias, unlike standard polling biases, goes beyond demographical representativeness and cannot be corrected by oversampling (i.e. selecting people without symptoms to test). Using controlled, incentivized experiments on a sample of all ages, we show that people who feel symptoms are up to 33 times more likely to seek testing. The bias in testing propensities leads to sizable prevalence bias: test positivity is inflated by up to five times, even if testing is costless. This effect varies greatly across time and age groups, making comparisons over time and across countries misleading. We validate our results using the REACT study in the UK and find that positivity figures have indeed a very large and time varying bias. We present calculations to debias positivity rates, but importantly, suggest a parsimonious way to sample the population bypassing the bias altogether. Our estimation is both real-time and consistently close to true values. These results are relevant for all epidemics, besides covid-19, when carriers have informative beliefs about their own status.

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