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Stable Biased Sampling

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  • Häfner, Samuel

    () (University of Basel)

Abstract

This paper presents a model in which sampling biases are evolutionary stable. We consider the sampling best response dynamics for a two-strategy population game having a unique equilibrium that is in mixed strategies. Allowing players to use differing sampling procedures, we model evolutionary competition between such procedures with a variant of the replicator dynamics that discriminates on the basis of average fitness among players with the same procedure. Using results on slow-fast systems, we find that the sampling bias in stable procedures is generically non-zero, that the size of the bias is the more extreme the closer the mixed equilibrium is to the boundary of (0,1), and that, if sample size increases, then the bias eventually decreases. Based on these observations, we argue that the presence of biases can be explained by an evolutionary second-best effect correcting for suboptimal choices induced by playing best response to small samples.

Suggested Citation

  • Häfner, Samuel, 2015. "Stable Biased Sampling," Working papers 2015/03, Faculty of Business and Economics - University of Basel.
  • Handle: RePEc:bsl:wpaper:2015/03
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    More about this item

    Keywords

    Sampling Best Response Dynamics; Sampling Bias; Evolutionary Second- Best; Two-Speed Dynamics;

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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