The Impact of Naive Advice and Observational Learning in Beauty-contest Games
b'We study the impact of advice or observation on the depth of reasoning in an experimental beauty-contest game. Both sources of information trigger faster convergence to the equilibrium. Yet, we find that subjects who receive na\\xefve advice outperform uninformed subjects permanently, whereas subjects who observe others\\u2019 past behavior before making their decision do only have a temporary advantage over uninformed subjects. We show in a simulation that the latter result is due to subjects failing to make the most out of observing others.'