Depth of strategic reasoning in games.
Orthodox game theory assumes indefinitely recursive reasoning ('I think that you think that I think em leader '), but human decision-makers, who are limited by bounded rationality, cannot handle limitless layers of complexity. Recent research corroborates earlier findings that human players tend to operate at only one or two levels of strategic depth.
Colman
Andrew M.
AM
School of Psychology, University of Leicester, University Road, LE1 7RH, Leicester, UK