Strength of dominance and depths of reasoning—An experimental study

Iterated elimination of strictly dominated strategies has a stronger epistemic foundation than iterated elimination of weakly dominated strategies. In this paper I investigate experimentally whether this translates into actual differences in behavior. In particular, I analyze whether it affects subjects’ depth of reasoning. This is done within two slightly different versions of a betting game under asymmetric information, in which very similar steps of reasoning can be applied to reach no-betting, or non-speculative, behavior, but of which only one can be solved by iterated elimination of strictly dominated strategies. The results indicate that strength of dominance matters indeed.