A bayesian hierarchical model for inferring player strategy types in a number guessing game

The p-beauty contest is a multi-player number guessing game that is widely used to study strategic behavior. Using new data from a speciallydesigned web experiment, we examine the evidence in favor of a popular class of behavioral economic models called k-step thinking models. After fitting a custom Bayesian spline model to the experimental data, we estimate that the proportion of players who could be using a k-step thinking strategy is approximately 25%.