ABSTRACT
This chapter focuses on strategic behavior, which primarily means focusing on how people try to predict what others might do. Economics is fundamentally about exchange and interaction between people. In the simple beauty contest, people are independently asked to say which out of a set of faces is the most beautiful. The p-beauty contest is an ideal place to begin comparing teams against individuals in a simple strategic environment. It also provides an interesting window onto financial markets where individual investors are routinely pitted against teams of investors. When looking at teams we have two levels of strategic interaction, that within the team and that between teams. The chapter focuses on how individuals choose a strategy, or learn from experience and looks at whether the decisions made by teams differ from those of individuals. The decisions that teams make could differ substantially from the decisions that individuals make.
