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Belief Formation in a Signalling Game without Common Prior: An Experiment

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  • Alex Possajennikov

    (School of Economics, University of Nottingham)

Abstract

Using belief elicitation, the paper investigates the formation and the evolution of beliefs in a signalling game in which a common prior on Sender's type is not induced. Beliefs are elicited about the type of the Sender and about the strategies of the players. The experimental subjects often start with di use uniform beliefs and update them in view of observations. However, the speed of updating is in uenced by the strength of the initial beliefs. An interesting result is that beliefs about strategies are updated faster than beliefs about types. In the medium run, for some speci cations of game parameters, this leads to outcomes being significantly different from the outcomes of the game in which a common prior is induced. It is also shown that elicitation of beliefs does not considerably change the pattern of play.

Suggested Citation

  • Alex Possajennikov, 2012. "Belief Formation in a Signalling Game without Common Prior: An Experiment," Discussion Papers 2012-06, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    • Handle: RePEc:not:notcdx:2012-06
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    Keywords

    beliefs; signalling; experiment; learning; belief elicitation;
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