A hidden Markov model for the detection of pure and mixed strategy play in games
Abstract
We propose a statistical model to assess whether individuals strategically use mixed strategies in repeated games. We formulate a hidden Markov model in which the latent state space contains both pure and mixed strategies, and allows switching between these states. We apply the model to data from an experiment in which human subjects repeatedly play a normal form game against a computer that always follows its part of the unique mixed strategy Nash equilibrium profile. Estimated results show significant mixed strategy play and non-stationary dynamics. We also explore the ability of the model to forecast action choice.Download Info
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Paper provided by Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University in its series Experimental Economics Center Working Paper Series with number 2012-11.Length: 26
Date of creation: Jul 2012
Date of revision:
Handle: RePEc:exc:wpaper:2012-11
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Keywords: Mixed Strategy; Nash Equilibrium; Experiment; Hidden Markov Model;Other versions of this item:
- Shachat, Jason & Swarthout, J. Todd & Wei, Lijia, 2012. "A hidden Markov model for the detection of pure and mixed strategy play in games," MPRA Paper 39896, University Library of Munich, Germany.
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-07-14 (All new papers)
- NEP-EXP-2012-07-14 (Experimental Economics)
- NEP-FOR-2012-07-14 (Forecasting)
- NEP-GTH-2012-07-14 (Game Theory)
References
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