In a beauty contest game such as predicting the average of respondents choosing a number between 0 and 100
A)the outcome is not normally the Nash equilibrium for the game.
B)the winner usually exhibits level-3 reasoning.
C)the winner must understand the non-rationality of the players.
D)All of the above.

Question

Quizplus · Accepted Answer

A) The outcome is not normally the Nash equilibrium for the game as players tend to select numbers lower than their own estimates to increase their chances of winning.
B) The winner usually exhibits level-3 reasoning as they consider the reasoning of others and adjust accordingly.
C) The winner must understand the non-rationality of the players as players may not always make the most logical choice.

In a Beauty Contest Game Such as Predicting the Average