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A generalized approach to belief learning in repeated games

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  • Ioannou, Christos A.
  • Romero, Julian

Abstract

We propose a methodology that is generalizable to a broad class of repeated games in order to facilitate operability of belief-learning models with repeated-game strategies. The methodology consists of (1) a generalized repeated-game strategy space, (2) a mapping between histories and repeated-game beliefs, and (3) asynchronous updating of repeated-game strategies. We implement the proposed methodology by building on three proven action-learning models. Their predictions with repeated-game strategies are then validated with data from experiments with human subjects in four, symmetric 2×2 games: Prisoner's Dilemma, Battle of the Sexes, Stag-Hunt, and Chicken. The models with repeated-game strategies approximate subjects' behavior substantially better than their respective models with action learning. Additionally, inferred rules of behavior in the experimental data overlap with the predicted rules of behavior.

Suggested Citation

  • Ioannou, Christos A. & Romero, Julian, 2014. "A generalized approach to belief learning in repeated games," Games and Economic Behavior, Elsevier, vol. 87(C), pages 178-203.
  • Handle: RePEc:eee:gamebe:v:87:y:2014:i:c:p:178-203
    DOI: 10.1016/j.geb.2014.05.007
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    Cited by:

    1. repec:eee:gamebe:v:107:y:2018:i:c:p:203-219 is not listed on IDEAS
    2. Eric Guerci & Nobuyuki Hanaki & Naoki Watanabe, 2015. "Meaningful Learning in Weighted Voting Games: An Experiment," Working Papers halshs-01216244, HAL.
    3. repec:kap:theord:v:83:y:2017:i:1:d:10.1007_s11238-017-9588-x is not listed on IDEAS
    4. repec:jdm:journl:v:13:y:2018:i:5:p:413-427 is not listed on IDEAS
    5. Eric Guerci & Nobuyuki Hanaki & Naoki Watanabe, 2017. "Meaningful learning in weighted voting games: an experiment," Theory and Decision, Springer, vol. 83(1), pages 131-153, June.
    6. Takashi Yamada & Nobuyuki Hanaki, 2016. "An Experiment on Lowest Unique Integer Games," Post-Print halshs-01204814, HAL.
    7. Yamada, Takashi & Hanaki, Nobuyuki, 2016. "An experiment on Lowest Unique Integer Games," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 463(C), pages 88-102.
    8. repec:kap:expeco:v:21:y:2018:i:3:d:10.1007_s10683-018-9568-1 is not listed on IDEAS
    9. Alejandro Lee-Penagos, 2016. "Learning to Coordinate: Co-Evolution and Correlated Equilibrium," Discussion Papers 2016-11, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.

    More about this item

    Keywords

    Adaptive models; Belief learning; Repeated-game strategies; Finite automata; Prisoner's Dilemma; Battle of the Sexes; Stag-Hunt; Chicken;

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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