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Does Observation Influence Learning?

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  • Olivier Armantier

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Abstract

A common value auction experiment is run to compare the relative influence of observation and experience on learning. It is shown that the ex-post observation of opponents' actions and payoffs homogenizes behavior and accelerates learning toward the Nash equilibrium. Besides, experiential and observational learning are both relevant and of comparable magnitude. A general reinforcement model for continuous strategies, encompassing choice reinforcement learning, direction learning and payoff dependent imitation, performs well in explaining the experimental data and it dominates competing models such as the reinforcement of best response strategies.

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File URL: http://www.sunysb.edu/economics/research/papers/2001/01-04.pdf
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Bibliographic Info

Paper provided by Stony Brook University, Department of Economics in its series Department of Economics Working Papers with number 01-04.

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Date of creation: 2001
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Handle: RePEc:nys:sunysb:01-04

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  1. Stahl, Dale O., 2000. "Rule Learning in Symmetric Normal-Form Games: Theory and Evidence," Games and Economic Behavior, Elsevier, vol. 32(1), pages 105-138, July.
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  5. Mookherjee Dilip & Sopher Barry, 1994. "Learning Behavior in an Experimental Matching Pennies Game," Games and Economic Behavior, Elsevier, vol. 7(1), pages 62-91, July.
  6. Schlag, Karl H., 1999. "Which one should I imitate?," Journal of Mathematical Economics, Elsevier, vol. 31(4), pages 493-522, May.
  7. Fernando Vega Redondo, 1996. "The evolution of walrasian behavior," Working Papers. Serie AD 1996-05, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  8. Steffen Huck & Hans-Theo Normann & Joerg Oechssler, 1997. "Learning in Cournot Oligopoly - An Experiment," Game Theory and Information 9707009, EconWPA, revised 22 Jul 1997.
  9. Abbink, K. & Sadrieh, A. & Zamir, S., 2002. "Fairness, Public Good, and Emotional Aspects of Punishment Behavior," Discussion Paper 2002-38, Tilburg University, Center for Economic Research.
  10. Garvin, Susan & Kagel, John H., 1994. "Learning in common value auctions: Some initial observations," Journal of Economic Behavior & Organization, Elsevier, vol. 25(3), pages 351-372, December.
  11. 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, vol. 88(4), pages 848-81, September.
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Cited by:
  1. Guillaume Fréchette, 2012. "Session-effects in the laboratory," Experimental Economics, Springer, vol. 15(3), pages 485-498, September.
  2. Dennis A. V. Dittrich & Werner Güth & Martin G. Kocher & Paul Pezanis‐Christou, 2012. "Loss Aversion and Learning to Bid," Economica, London School of Economics and Political Science, vol. 79(314), pages 226-257, 04.
  3. Shafran, Aric P., 2012. "Learning in games with risky payoffs," Games and Economic Behavior, Elsevier, vol. 75(1), pages 354-371.
  4. Fréchette, Guillaume R., 2009. "Learning in a multilateral bargaining experiment," Journal of Econometrics, Elsevier, vol. 153(2), pages 183-195, December.
  5. Marco Casari & John C. Ham & John H. Kagel, 2005. "Selection bias, demographic effects, and ability effects in common value auction experiments," Staff Reports 213, Federal Reserve Bank of New York.
  6. Olivier Armantier, 2006. "Do Wealth Differences Affect Fairness Considerations?," CIRANO Working Papers 2006s-13, CIRANO.
  7. Johanna Goertz, 2012. "Market composition and experience in common-value auctions," Experimental Economics, Springer, vol. 15(1), pages 106-127, March.
  8. Robert S. Gazzale, 2009. "Learning to Play Nash from the Best," Department of Economics Working Papers 2009-03, Department of Economics, Williams College.
  9. Alan Mehlenbacher, 2007. "Multiagent System Platform for Auction Simulations," Department Discussion Papers 0706, Department of Economics, University of Victoria.
  10. Zacharias Maniadis & Joshua Miller, 2012. "The Weight of Personal Experience: an Experimental Measurement," Working Papers 452, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  11. Goeree, Jacob K. & Offerman, Theo & Schram, Arthur, 2006. "Using first-price auctions to sell heterogeneous licenses," International Journal of Industrial Organization, Elsevier, vol. 24(3), pages 555-581, May.

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