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Does observation influence learning?

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  • Armantier, Olivier

Abstract

A common value auction experiment is run to compare the relative influence of observation and experience on learning. It is shown that the ex-post observation of opponents' actions and payoffs homogenizes behavior and accelerates learning toward the Nash equilibrium. Besides, experiential and observational learning are both relevant and of comparable magnitude. A general reinforcement model for continuous strategies, encompassing choice reinforcement learning, direction learning and payoff dependent imitation, performs well in explaining the experimental data and it dominates competing models such as the reinforcement of best response strategies.

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Bibliographic Info

Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 46 (2004)
Issue (Month): 2 (February)
Pages: 221-239

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Handle: RePEc:eee:gamebe:v:46:y:2004:i:2:p:221-239

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Web page: http://www.elsevier.com/locate/inca/622836

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References

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  1. Stahl, Dale O., 2000. "Rule Learning in Symmetric Normal-Form Games: Theory and Evidence," Games and Economic Behavior, Elsevier, vol. 32(1), pages 105-138, July.
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  5. Olivier Armantier, 2001. "Does Observation Influence Learning?," Department of Economics Working Papers 01-04, Stony Brook University, Department of Economics.
  6. Antonio Cabrales & Walter Garcia Fontes, 2000. "Estimating learning models from experimental data," Economics Working Papers 501, Department of Economics and Business, Universitat Pompeu Fabra.
  7. Theo Offerman & Jan Potters & Joep Sonnemans, 1997. "Imitation and Belief Learning in an Oligopoly Experiment," Tinbergen Institute Discussion Papers 97-116/1, Tinbergen Institute.
  8. Steffen Huck & Hans-Theo Normann & Joerg Oechssler, 1997. "Learning in Cournot Oligopoly - An Experiment," Game Theory and Information 9707009, EconWPA, revised 22 Jul 1997.
  9. John Duffy & Nick Feltovich, 1997. "Does Observation of Others Affect Learning in Strategic Environments? An Experimental Study," Levine's Working Paper Archive 592, David K. Levine.
  10. McKelvey Richard D. & Palfrey Thomas R., 1995. "Quantal Response Equilibria for Normal Form Games," Games and Economic Behavior, Elsevier, vol. 10(1), pages 6-38, July.
  11. Schlag, Karl H., 1996. "Which one should I imitate?," Discussion Paper Serie B 365, University of Bonn, Germany.
  12. Erev, Ido & Roth, Alvin E, 1998. "Predicting How People Play Games: Reinforcement Learning in Experimental Games with Unique, Mixed Strategy Equilibria," American Economic Review, American Economic Association, vol. 88(4), pages 848-81, September.
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Cited by:
  1. Dennis A. V. Dittrich & Werner Güth & Martin G. Kocher & Paul Pezanis‐Christou, 2012. "Loss Aversion and Learning to Bid," Economica, London School of Economics and Political Science, vol. 79(314), pages 226-257, 04.
  2. Zacharias Maniadis & Joshua Miller, 2012. "The Weight of Personal Experience: an Experimental Measurement," Working Papers 452, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  3. Marco Casari & John C. Ham & John H. Kagel, 2007. "Selection Bias, Demographic Effects, and Ability Effects in Common Value Auction Experiments," American Economic Review, American Economic Association, vol. 97(4), pages 1278-1304, September.
  4. Shafran, Aric P., 2012. "Learning in games with risky payoffs," Games and Economic Behavior, Elsevier, vol. 75(1), pages 354-371.
  5. Olivier Armantier, 2006. "Do Wealth Differences Affect Fairness Considerations?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(2), pages 391-429, 05.
  6. Armantier, Olivier, 2004. "Does observation influence learning?," Games and Economic Behavior, Elsevier, vol. 46(2), pages 221-239, February.
  7. Goeree, Jacob K. & Offerman, Theo & Schram, Arthur, 2006. "Using first-price auctions to sell heterogeneous licenses," International Journal of Industrial Organization, Elsevier, vol. 24(3), pages 555-581, May.
  8. Guillaume R. Fréchette, 2006. "Session Effects in the Laboratory," CIRANO Working Papers 2006s-21, CIRANO.
  9. Alan Mehlenbacher, 2007. "Multiagent System Platform for Auction Simulations," Department Discussion Papers 0706, Department of Economics, University of Victoria.
  10. Robert S. Gazzale, 2009. "Learning to Play Nash from the Best," Department of Economics Working Papers 2009-03, Department of Economics, Williams College.
  11. Fréchette, Guillaume R., 2009. "Learning in a multilateral bargaining experiment," Journal of Econometrics, Elsevier, vol. 153(2), pages 183-195, December.
  12. Johanna Goertz, 2012. "Market composition and experience in common-value auctions," Experimental Economics, Springer, vol. 15(1), pages 106-127, March.

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