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Testing the TASP: An experimental investigation of learning in games with unstable equilibria

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  • Cason, Timothy N.
  • Friedman, Daniel
  • Hopkins, Ed

Abstract

We report experiments studying mixed strategy Nash equilibria that are theoretically stable or unstable under learning. The Time Average Shapley Polygon (TASP) predicts behavior in the unstable case. We study two versions of Rock-Paper-Scissors that include a fourth strategy, Dumb. The unique Nash equilibrium is identical in the two games, but the predicted frequency of Dumb is much higher in the game where the NE is stable. Consistent with TASP, the observed frequency of Dumb is lower and play is further from Nash in the high payoff unstable treatment. However, Dumb is played too frequently in all treatments.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 145 (2010)
Issue (Month): 6 (November)
Pages: 2309-2331

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Handle: RePEc:eee:jetheo:v:145:y:2010:i:6:p:2309-2331

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Web page: http://www.elsevier.com/locate/inca/622869

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Keywords: Games Experiments TASP Learning Unstable Mixed equilibrium Fictitious play;

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Citations

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Cited by:
  1. Timothy N. Cason & Daniel Friedman & ED Hopkins, 2014. "Cycles and Instability in a Rock--Paper--Scissors Population Game: A Continuous Time Experiment," Review of Economic Studies, Oxford University Press, vol. 81(1), pages 112-136.
  2. Martin Hahn, 2012. "An Evolutionary Analysis of Varian’s Model of Sales," Dynamic Games and Applications, Springer, vol. 2(1), pages 71-96, March.

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