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Best Responding to What? A Behavioral Approach to One Shot Play in 2x2 Games

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Author Info
Gallice, Andrea

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Abstract

We introduce a simple procedure to be used for selecting the strategies most likely to be played by inexperienced agents who interact in one shot 2x2 games. We start with an axiomatic description of a function that may capture players' beliefs. Various proposals connected with the concept of mixed strategy Nash equilibrium do not match this description. On the other hand minimax regret obeys all the axioms. Therefore we use minimax regret to approximate players' beliefs and we let players best respond to these conjectured beliefs. When compared with existing experimental evidences about one shot matching pennies games, this procedure correctly indicates the choices of the vast majority of the players. Applications to other classes of games are also explored.

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Paper provided by University of Munich, Department of Economics in its series Discussion Papers in Economics with number 1365.

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Date of creation: Jan 2007
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Handle: RePEc:lmu:muenec:1365

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Related research
Keywords: prediction beliefs mixed strategy Nash equilibrium minimax regret matching pennies experiments.

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Find related papers by JEL classification:
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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References listed on IDEAS
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  4. Andrea Gallice, 2006. "Predicting one Shot Play in 2x2 Games Using Beliefs Based on Minimax Regret," Working Papers 2006.31, Fondazione Eni Enrico Mattei. [Downloadable!]
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    Other versions:
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    Other versions:
  13. Andrea Gallice, 2007. "Some equivalence results between mixed strategy Nash equilibria and minimax regret in 2x2 games," Economics Bulletin, Economics Bulletin, vol. 3(29), pages 1-8. [Downloadable!]
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  1. Andrea Gallice, 2007. "Some equivalence results between mixed strategy Nash equilibria and minimax regret in 2x2 games," Economics Bulletin, Economics Bulletin, vol. 3(29), pages 1-8. [Downloadable!]
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