Strategic Uncertainty and Probabilistic Sophistication

This paper uses laboratory experiments to study subjects' assessment of uncertainty resulting from strategic and non-strategic decisions other players. Non-strategic events are defined by the colors balls drawn urns, whereas action choice in Stag Hunt (SH) Prisoners' Dilemma (PD) games. We elicit matching probabilities examine if they satisfy law probability including monotonicity additivity. Violations observed for both sources, but more substantial uncertainty. In particular, we observe a coordination fallacy, violation whereby weight placed on symmetric profile games exceeds that corresponding choice. The is found be severer an efficient profile.