Testing Game Theory in the Field: Swedish LUPI Lottery Games

Game theory predictions are challenging to test with field data because those predictions are usually sensitive to details about strategies, information and payoffs which are difficult to observe in the field. As Robert Aumann pointed out: “In applications, when you want to do something on the strategic level, you must have very precise rules [...] An auction is a beautiful example of this, but it is very special. It rarely happens that you have rules like that (Eric van Damme 1998).” In this paper we exploit such a happening, using field data from a Swedish lottery game. In this lottery, players simultaneously choose positive integers from 1 to K. The winner is the player who chooses the lowest number that nobody else picked. We call this the LUPI game, because the lowest unique positive integer wins. Because strategies and payoffs are known, the field setting is unusually well-structured