This paper proposes a structural nonequilibrium model of initial responses to incomplete-information games based on "level-k" thinking, which describes behavior in many experiments with complete-information games. We derive the model's implications in first- and second-price auctions with...

This paper reports experiments designed to study strategic sophistication, the extent to which behavior in games reflects attempts to predict others' decisions, taking their incentives into account. We study subjects' initial responses to normal-form games with various patterns of iterated...