Do repeated game players detect patterns in opponents? Revisiting the Nyarko & Schotter belief elicitation experiment
The purpose of this paper is to reexamine the seminal belief elicitation experiment by Nyarko and Schotter (2002) under the prism of pattern recognition. Instead of modeling elicited beliefs by a standard weighted ﬁctitious play model this paper proposes a generalized variant of ﬁctitious play that is able to detect two period patterns in opponents’ behavior. Evidence is presented that these generalized pattern detection models provide a better ﬁt than standard weighted ﬁctitious play. Individual heterogeneity was discovered as ten players were classiﬁed as employing a two period pattern detection ﬁctitious play model, compared to eleven players who followed a non-pattern detecting ﬁctitious play model. The average estimates of the memory parameter for these classes were 0.678 and 0.456 respectively, with ﬁve individual cases where the memory parameter was equal to zero. This is in sharp contrast to the estimates obtained from standard weighted ﬁctitious play models which are centred on one, a bias introduced by the absence of a constant in these models. Non-pattern detecting ﬁctitious play models with memory parameters of zero are equivalent to the win-stay/lose-shift heuristic, and therefore some sub jects seem to be employing a simple heuristic alternative to more complex learning models. Simulations of these various belief formation models show that that this simple heuristic is quite eﬀective against other more complex ﬁctitious play models.
|Date of creation:||09 Jan 2008|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Haruvy, Ernan & Stahl, Dale O., 2004. "Deductive versus inductive equilibrium selection: experimental results," Journal of Economic Behavior & Organization, Elsevier, vol. 53(3), pages 319-331, March.
- repec:spr:compst:v:59:y:2004:i:3:p:359-373 is not listed on IDEAS
- Yaw Nyarko & Andrew Schotter, 2002. "An Experimental Study of Belief Learning Using Elicited Beliefs," Econometrica, Econometric Society, vol. 70(3), pages 971-1005, May.
- Jason Shachat & J. Todd Swarthout, 2003. "Do We Detect and Exploit Mixed Strategy Play by Opponents?," Experimental 0310001, EconWPA.
- P.-A. Chiappori, 2002. "Testing Mixed-Strategy Equilibria When Players Are Heterogeneous: The Case of Penalty Kicks in Soccer," American Economic Review, American Economic Association, vol. 92(4), pages 1138-1151, September.
- Timothy C. Salmon, 2001. "An Evaluation of Econometric Models of Adaptive Learning," Econometrica, Econometric Society, vol. 69(6), pages 1597-1628, November.
- Roth, Alvin E. & Erev, Ido, 1995. "Learning in extensive-form games: Experimental data and simple dynamic models in the intermediate term," Games and Economic Behavior, Elsevier, vol. 8(1), pages 164-212.
- Jason Shachat & J. Todd Swarthout, 2004. "Do we detect and exploit mixed strategy play by opponents?," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 59(3), pages 359-373, 07.
- Ignacio Palacios-Huerta, 2001.
"Professionals Play Minimax,"
2001-17, Brown University, Department of Economics.
- McKelvey, Richard D. & Palfrey, Thomas R., 1994.
"Quantal Response Equilibria For Normal Form Games,"
883, California Institute of Technology, Division of the Humanities and Social Sciences.
- Papke, Leslie E & Wooldridge, Jeffrey M, 1996.
"Econometric Methods for Fractional Response Variables with an Application to 401(K) Plan Participation Rates,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 11(6), pages 619-632, Nov.-Dec..
- Leslie E. Papke & Jeffrey M. Wooldridge, 1993. "Econometric Methods for Fractional Response Variables with an Application to 401(k) Plan Participation Rates," NBER Technical Working Papers 0147, National Bureau of Economic Research, Inc.
- Colin Camerer & Teck-Hua Ho, 1999. "Experience-weighted Attraction Learning in Normal Form Games," Econometrica, Econometric Society, vol. 67(4), pages 827-874, July.
- Antonio Cabrales & Walter Garcia Fontes, 2000. "Estimating learning models from experimental data," Economics Working Papers 501, Department of Economics and Business, Universitat Pompeu Fabra.
- Spiliopoulos, Leonidas, 2008. "Humans versus computer algorithms in repeated mixed strategy games," MPRA Paper 6672, University Library of Munich, Germany.
- Amos Tversky & Daniel Kahneman, 1979.
"Prospect Theory: An Analysis of Decision under Risk,"
Levine's Working Paper Archive
7656, David K. Levine.
- Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
- Atanasios Mitropoulos, 2001. "On the Measurement of the Predictive Success of Learning Theories in Repeated Games," Experimental 0110001, EconWPA.
- Matthew Rabin, 2002. "Inference by Believers in the Law of Small Numbers," The Quarterly Journal of Economics, Oxford University Press, vol. 117(3), pages 775-816.
- Mark Walker & John Wooders, 2001. "Minimax Play at Wimbledon," American Economic Review, American Economic Association, vol. 91(5), pages 1521-1538, December.
- Cheung, Yin-Wong & Friedman, Daniel, 1997. "Individual Learning in Normal Form Games: Some Laboratory Results," Games and Economic Behavior, Elsevier, vol. 19(1), pages 46-76, April.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:6666. 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: (Joachim Winter)
If references are entirely missing, you can add them using this form.