Ruhr Economic Papers

Ruhr Economic Papers #360

Exploring the Capability to Backward Induct – An Experimental Study with Children and Young Adults

by Jeannette Brosig-Koch, Timo Heinrich and Christoph Helbach

University of Duisburg-Essen, 07/2012, 33 S./p., 8 Euro, ISBN 978-3-86788-414-3 DOI: 10.4419/86788414

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Abstract

We investigate learning and the development of the capability to backward induct in children and young adults aged 6 to 23 under controlled laboratory conditions. The experimental design employs a modified version of the race game. As in the original game (see Burks et al., 2009, Dufwenberg et al., 2010, Gneezy et al., 2010, and Levitt et al., 2011), subjects need to apply backward induction in order to solve the games. We find that subjects’ capability to backward induct improves with age, but that this process systematically diff ers across gender. Our repetition of the games provides insights into differences in learning between age groups and across gender.

JEL-Classification: C72, J13, C91

Keywords: Backward induction; learning; age effects; experimental economics; children

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