An experimental study of learning and limited information in games
AbstractWe report on experiments that tested the predictions of competing theories of learning in games. Experimental subjects played a version of the three-person matching-pennies game. The unique mixed-strategy Nash equilibrium of this game is locally unstable under naive Bayesian learning. Sophisticated Bayesian learning predicts that expectations will converge to Nash equilibrium if players observe the entire history of play. Neither theory requires payoffs to be common knowledge. We develop maximum-likelihood tests for the independence conditions implied by the mixed-strategy Nash equilibrium. We find that perfect monitoring was sufficient and complete payoff information was unnecessary for average play to be consistent with the equilibrium (as is predicted by sophisticated Bayesian learning). When subjects had imperfect monitoring and incomplete payoff information, average play was inconsistent with the equilibrium.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Minneapolis in its series Staff Report with number 176.
Date of creation: 1994
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- Pedro Rey Biel, 2005. "Equilibrium Play and Best Response in Sequential Constant Sum Games," Experimental 0506004, EconWPA.
- Pedro Rey-Biel, 2005. "Equilibrium Play and Best Reply to (Stated) Beliefs in Constant Sum Games," Experimental 0512003, EconWPA.
- Pedro Rey Biel, 2005.
"Equilibrium PLay and Best Response to (Stated) Beliefs in Constant Sum Games,"
- Pedro Rey-Biel, 2007. "Equilibrium Play and Best Response to (Stated) Beliefs in Constant Sum Games," UFAE and IAE Working Papers 676.07, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
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