In many situations a decision maker's outcome does not depend on his or her own choice alone but upon the choices of others. Investing in the stock market, crossing an intersection where there is opposing traffic, and playing poker are all examples. A game known as the “p-beauty-contest” has been widely used in economic studies to examine some of the simplest principles of interdependent decision making (Nagel 1995, Nagel 1999, Stahl 2001). In the “p-beauty-contest” game subjects select a number in the range [0, 100] and the winner is the individual whose selection is closest to.
