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Predicting one Shot Play in 2x2 Games Using Beliefs Based on Minimax Regret

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  • Andrea Gallice

    (European University Institute)

Abstract

We present a simple procedure that selects the strategies most likely to be played by inexperienced agents who interact in one shot 2x2 matching pennies games. As a first step we axiomatically describe players’ beliefs. We find the minimax regret criterion to be the simplest functional form that satisfies all the axioms. Then we hypothesize players act as if they were best responding to the belief their opponent plays accordino to minimax regret. When compared with existing experimental evidences about one shot matching pennies games, the procedure correctly indicates the choices of around 80% of the players. Applications to other classes of games are also explored.

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Bibliographic Info

Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2006.31.

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Date of creation: Feb 2006
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Handle: RePEc:fem:femwpa:2006.31

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Keywords: Predictions; Minimax regret; Beliefs; Matching pennies; Experiments;

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  1. Miguel Costa-Gomes & Vincent P. Crawford & Bruno Broseta, . "Cognition and Behavior in Normal-Form Games:An Experimental Study," Discussion Papers, Department of Economics, University of York 00/45, Department of Economics, University of York.
  2. Miguel A. Costa-Gomes & Georg Weizs�cker, 2008. "Stated Beliefs and Play in Normal-Form Games," Review of Economic Studies, Oxford University Press, vol. 75(3), pages 729-762.
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  7. McKelvey, Richard D. & Palfrey, Thomas R. & Weber, Roberto A., 2000. "The effects of payoff magnitude and heterogeneity on behavior in 2 x 2 games with unique mixed strategy equilibria," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 42(4), pages 523-548, August.
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  14. Goeree, Jacob K. & Holt, Charles A. & Palfrey, Thomas R., 2003. "Risk averse behavior in generalized matching pennies games," Games and Economic Behavior, Elsevier, Elsevier, vol. 45(1), pages 97-113, October.
  15. Haruvy, Ernan & Stahl, Dale O., 2004. "Deductive versus inductive equilibrium selection: experimental results," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 53(3), pages 319-331, March.
  16. Croson, Rachel T. A., 2000. "Thinking like a game theorist: factors affecting the frequency of equilibrium play," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 41(3), pages 299-314, March.
  17. Andrea Gallice, 2007. "Some equivalence results between mixed strategy Nash equilibria and minimax regret in 2x2 games," Economics Bulletin, AccessEcon, vol. 3(29), pages 1-8.
  18. 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, American Economic Association, vol. 88(4), pages 848-81, September.
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Cited by:
  1. Raghu Suryanarayanan, 2006. "A Model of Anticipated Regret and Endogenous Beliefs," CSEF Working Papers, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy 161, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 01 Dec 2008.
  2. Gallice, Andrea, 2007. "Best Responding to What? A Behavioral Approach to One Shot Play in 2x2 Games," Discussion Papers in Economics 1365, University of Munich, Department of Economics.

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