On the Absorbability of the Guessing Game Theory -A Theoretical and Experimental Analysis

Theory absorption, a notion introduced by Morgenstern and Schwödiauer (1972)and further elaborated by Güth and Kliemt (2004), discusses the problem whether atheory can survive its own acceptance. Whereas this holds for strategic equilibria accordingto the assumptions on which they are based, the problem whether theories areabsorbable by at most boundedly rational decision makers is hardly discussed. Basedon guessing game experiments, we discuss the requirements of equilibrium theory absorptionand experimentally test the effects of informing none, some, or all playersabout how to derive equilibrium predictions.