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

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  • Gallice, Andrea

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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File URL: http://epub.ub.uni-muenchen.de/1365/1/Gallice_-_Best_Responding_-_Munich_DP.pdf
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Bibliographic Info

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

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Cited by:
  1. 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.
  2. repec:ebl:ecbull:v:3:y:2007:i:29:p:1-8 is not listed on IDEAS

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