Asynchrony and Learning in Serial and Average Cost Pricing Mechanisms: An Experimental Study
AbstractThis paper reports the first experimental study of the serial and the average cost pricing mechanism under three different treatments: a complete information treatment and two treatments designed to simulate distributed systems like the Internet with extremely limited information, synchronous and asynchronous moves. Although both games are dominance-solvable and the proportion of equilibrium play is statistically indistinguishable under complete information, their performance does change dramatically in settings that resemble distributed systems: the serial mechanism performs robustly better than the average cost pricing mechanism both in terms of convergence to Nash/Stackelberg equilibrium and system efficiency. These results provide some support for Friedman and Shenker's (1997) new solution concepts for implementation on the Internet. Four payoff-based learning models are simulated in order to understand individual learning behavior in distributed systems. Under the serial mechanism the payoff-assessment learning model (Sarin and Vahid (1997)) provides the best fit to the data, followed by the experience-weighted attraction learning model (Camerer and Ho (1999)), which in turn, is followed by a simple reinforcement learning model and the responsive learning automata. Under the average cost pricing mechanism, both the experience-weighted attraction learning model and the reinforcement model track the data better than the responsive learning automata, however, other pair-wise rankings of the four models are statistically insignificant.
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Bibliographic InfoPaper provided by University of Bonn, Germany in its series Discussion Paper Serie A with number 592.
Date of creation: Feb 1992
Date of revision:
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Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany
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serial mechanism; asynchrony; learning; experiment;
Find related papers by JEL classification:
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
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