IDEAS home Printed from
   My bibliography  Save this article

Learning in Games : Neural Computations underlying Strategic Learning


  • Ming Hsu
  • Lusha Zhu


The past decade has witnessed an unprecedented growth in our understanding of the brain basis of economic decision-making. In particular, research is uncovering not only the location of brain regions where certain processes are taking place, but also the nature of the (economically meaningful) latent variables that are represented, as well as how they relate to behavior. This transition from understanding where to how economic decisions are being made in the brain has been integral to relating neural processes to economic models of behavior. This progress, however, has been notably uneven. Neuroeconomic studies of individual decision-making, such as those involve risk and time preferences, have the benefit of drawing on decades of work from neuroscientific studies of animal behavior. Critically, many of these findings are based on quantitative, computational approach that lends well to economic experimentation. In contrast, our understanding of the neural systems underlying social behavior is much less specific. A large measure of the current challenge in fact arises from the empirical shortcomings of standard game theoretic predictions of behavior, which are largely equilibrium-based. Using our own study as an example, we show how one can directly search for the latent variables implied by current economic models of strategic learning, and attempt to localize them in the brain. Specifically, we show that the neural systems underlying strategic learning build directly on top of those involved in simple trial-and-error learning, but incorporate additional computations that capture belief-based learning. Finally, we discuss how our approach can be extended to address fundamental problems in economics. JEL Classification: C92, D83.

Suggested Citation

  • Ming Hsu & Lusha Zhu, 2012. "Learning in Games : Neural Computations underlying Strategic Learning," Recherches économiques de Louvain, De Boeck Université, vol. 78(3), pages 47-72.
  • Handle: RePEc:cai:reldbu:rel_783_0047

    Download full text from publisher

    File URL:
    Download Restriction: free

    File URL:
    Download Restriction: free

    References listed on IDEAS

    1. Sujoy Chakravarty & Jaideep Roy, 2009. "Recursive expected utility and the separation of attitudes towards risk and ambiguity: an experimental study," Theory and Decision, Springer, vol. 66(3), pages 199-228, March.
    2. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2008. "Trusting the Stock Market," Journal of Finance, American Finance Association, vol. 63(6), pages 2557-2600, December.
    3. Houser, Daniel & Schunk, Daniel & Winter, Joachim, 2010. "Distinguishing trust from risk: An anatomy of the investment game," Journal of Economic Behavior & Organization, Elsevier, vol. 74(1-2), pages 72-81, May.
    4. Schechter, Laura, 2007. "Traditional trust measurement and the risk confound: An experiment in rural Paraguay," Journal of Economic Behavior & Organization, Elsevier, vol. 62(2), pages 272-292, February.
    5. Sacha Bourgeois-gironde & Anne Corcos, 2011. "Discriminating strategic reciprocity and acquired trust in the repeated trust-game," Economics Bulletin, AccessEcon, vol. 31(1), pages 177-188.
    6. Cox, James C., 2004. "How to identify trust and reciprocity," Games and Economic Behavior, Elsevier, vol. 46(2), pages 260-281, February.
    7. Bohnet, Iris & Zeckhauser, Richard, 2004. "Trust, risk and betrayal," Journal of Economic Behavior & Organization, Elsevier, vol. 55(4), pages 467-484, December.
    8. Daniel Ellsberg, 2000. "Risk, Ambiguity and the Savage Axioms," Levine's Working Paper Archive 7605, David K. Levine.
    9. Anne Corcos & François Pannequin & Sacha Bourgeois-gironde, 2012. "Is trust an ambiguous rather than a risky decision?," Economics Bulletin, AccessEcon, vol. 32(3), pages 2255-2266.
    10. repec:hal:journl:ijn_00734563 is not listed on IDEAS
    11. Kanagaretnam, Kiridaran & Mestelman, Stuart & Nainar, Khalid & Shehata, Mohamed, 2009. "The impact of social value orientation and risk attitudes on trust and reciprocity," Journal of Economic Psychology, Elsevier, vol. 30(3), pages 368-380, June.
    12. Camerer, Colin & Weber, Martin, 1992. "Recent Developments in Modeling Preferences: Uncertainty and Ambiguity," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 325-370, October.
    13. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    14. Olsen, Robert A., 2008. "Trust as risk and the foundation of investment value," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(6), pages 2189-2200, December.
    15. Eckel, Catherine C. & Wilson, Rick K., 2004. "Is trust a risky decision?," Journal of Economic Behavior & Organization, Elsevier, vol. 55(4), pages 447-465, December.
    16. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
    Full references (including those not matched with items on IDEAS)

    More about this item


    strategic learning; game theory; neuroeconomics;

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cai:reldbu:rel_783_0047. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jean-Baptiste de Vathaire). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.