What’s Your Level? (Level-k Theory Explained)

Imagine a classroom filled with approximately 30 students. The class is a lecture on neuroeconomics, the students are all behavioural scientists or behavioural economists. Our lecturer (also a neuroeconomist) suddenly turns around and proposed we play a little game. Tension in the room rises. People look at each other either excitedly or warily. “Let’s play the beauty contest.” Now don’t think my neuroeconomics lecturer is some type of creep. The beauty contest has nothing to do with the actual looks of its participants when being played nowadays. Let me explain. The beauty contest is a concept developed by John Maynard…...