We investigate the relevance of conditional reasoning and belief formation for the occurrence of the winner's curse with the help of two experimental manipulations. First, we compare results from a very simple common-value auction game with results from a transformed version of this game that...

We experimentally investigate behavior and reasoning in various competitive resource allocation games with large strategy spaces. In the experiment, a team of two players plays as one entity against other teams. Team members communicate with one another before choosing a strategy. We analyze...

In the theory of psychological games it is assumed that players preferences on material consequences depend on endogenous beliefs. Most of the applications of this theoretical framework assume that the psychological utility functions representing such preferences are common knowledge. But this...