**Must-Read:** Richard Thaler http://en.m.wikiversity.org/wiki/Economic_Classroom_Experiments/Guessing_Game: "If you pick zero in the 'Beauty Contest' game...

...you are smart enough to solve the game for the Nash equilibrium. And you are dumb enough to think everyone else can solve for the Nash equilibrium. And dumb enough to think everyone else will think everyone else will think everyone else will solve for the Nash equilibrium. Infinite regress--you are a singularity of dumb...