Centipede Game
Todd Kaplan
Centipede Game
Rosenthal (1981),
What has the highest payoffs?
What is the subgame-perfect equilibrium?
Self-Interest Hurts
• Binmore (2005) exchange of goods between
parties that distrust each other.
• Mating behavior of an hermaphroditic sea
bass which take turns exchanging eggs to
fertilize.
Outcomes
• People tend to continue farther than one would
think.
• Perhaps some players are altruistic.
– Best to continue then.
• Perhaps some players are irrational.
– Best to be irrational as well.
• Palacios-Huerta and Volij (2009) chess players
play stop earlier the higher their rating (and that
of their opponents). All Grandmasters in the
experiment stopped at their first chance.