The Dirty Faces Game Revisited

We compare behavior in Weber's (2001) Dirty Faces Game with that in a modified version. The modifified version is designed to reduce the level of strategic uncertainty by ruling out some equilibria in weakly dominated strategies. We find that in the three-player version of the game reduced strategic uncertainty leads to increased agreement with equilibrium in situations where common knowledge of rationality is required. We conclude that a considerable fraction of deviation from equilibrium is caused by the lack of common knowledge of rationality. We don't find this effect in the two-player version of the game.