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An Experimental Investigation of Optimal Learning in Coordination Games

Author

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  • Blume, Andreas

    () (University of Iowa)

  • Gneezy, Uri

    (University of Haifa)

Abstract

This paper presents an experimental investigation of optimal learning in repeated coordination games. We find evidence for such learning when we limit both the cognitive demands on players and the information available to them. We also find that uniqueness of the optimal strategy is no guarantee for it to be used. Optimal learning can be impeded by both irrelevant information and the complexity of the coordination task.

Suggested Citation

  • Blume, Andreas & Gneezy, Uri, 1998. "An Experimental Investigation of Optimal Learning in Coordination Games," Working Papers 98-10, University of Iowa, Department of Economics.
  • Handle: RePEc:uia:iowaec:98-10
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    References listed on IDEAS

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    1. John C. Harsanyi & Reinhard Selten, 1988. "A General Theory of Equilibrium Selection in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582384, January.
    2. Fudenberg, Drew & Levine, David, 1998. "Learning in games," European Economic Review, Elsevier, vol. 42(3-5), pages 631-639, May.
    3. Erev, Ido & Roth, Alvin E, 1998. "Predicting How People Play Games: Reinforcement Learning in Experimental Games with Unique, Mixed Strategy Equilibria," American Economic Review, American Economic Association, vol. 88(4), pages 848-881, September.
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    5. Bacharach, Michael & Bernasconi, Michele, 1997. "The Variable Frame Theory of Focal Points: An Experimental Study," Games and Economic Behavior, Elsevier, vol. 19(1), pages 1-45, April.
    6. Blume, Andreas, et al, 1998. "Experimental Evidence on the Evolution of Meaning of Messages in Sender-Receiver Games," American Economic Review, American Economic Association, vol. 88(5), pages 1323-1340, December.
    7. Sugden, Robert, 1995. "A Theory of Focal Points," Economic Journal, Royal Economic Society, vol. 105(430), pages 533-550, May.
    8. 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.
    9. Crawford, Vincent P & Haller, Hans, 1990. "Learning How to Cooperate: Optimal Play in Repeated Coordination Games," Econometrica, Econometric Society, vol. 58(3), pages 571-595, May.
    10. Roth, Alvin E & Murnighan, J Keith, 1982. "The Role of Information in Bargaining: An Experimental Study," Econometrica, Econometric Society, vol. 50(5), pages 1123-1142, September.
    11. Rubinstein, Ariel, 1996. "Why Are Certain Properties of Binary Relations Relatively More Common in Natural Language?," Econometrica, Econometric Society, vol. 64(2), pages 343-355, March.
    12. Mehta, Judith & Starmer, Chris & Sugden, Robert, 1994. "The Nature of Salience: An Experimental Investigation of Pure Coordination Games," American Economic Review, American Economic Association, vol. 84(3), pages 658-673, June.
    13. 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.
    14. J. Robinson, 1969. "An Iterative Method of Solving a Game," Levine's Working Paper Archive 422, David K. Levine.
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    Cited by:

    1. Dietmar Fehr & Frank Heinemann & Aniol Llorente-Saguer, 2011. "The Power of Sunspots: An Experimental Analysis," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2011_33, Max Planck Institute for Research on Collective Goods.
    2. repec:spr:joecth:v:64:y:2017:i:2:d:10.1007_s00199-016-0998-8 is not listed on IDEAS
    3. Bosch-Domènech, Antoni & Vriend, Nicolaas J., 2013. "On the role of non-equilibrium focal points as coordination devices," Journal of Economic Behavior & Organization, Elsevier, vol. 94(C), pages 52-67.
    4. Luhan, Wolfgang J. & Poulsen, Anders U. & Roos, Michael W.M., 2017. "Real-time tacit bargaining, payoff focality, and coordination complexity: Experimental evidence," Games and Economic Behavior, Elsevier, vol. 102(C), pages 687-699.
    5. Blume, Andreas & Gneezy, Uri, 2010. "Cognitive forward induction and coordination without common knowledge: An experimental study," Games and Economic Behavior, Elsevier, vol. 68(2), pages 488-511, March.
    6. Andonie, Costel & Kuzmics, Christoph, 2012. "Pre-election polls as strategic coordination devices," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 681-700.
    7. Külpmann, Philipp & Khantadze, Davit, 2016. "Identifying the reasons for coordination failure in a laboratory experiment," Center for Mathematical Economics Working Papers 567, Center for Mathematical Economics, Bielefeld University.
    8. repec:pit:wpaper:382 is not listed on IDEAS
    9. Maarten C.W. Janssen, 2006. "On the Strategic Use of Focal Points in Bargaining Situations," Tinbergen Institute Discussion Papers 06-040/1, Tinbergen Institute.
    10. Janssen, Maarten C.W., 2006. "On the strategic use of focal points in bargaining situations," Journal of Economic Psychology, Elsevier, vol. 27(5), pages 622-634, October.
    11. Kuzmics, Christoph & Palfrey, Thomas & Rogers, Brian W., 2014. "Symmetric play in repeated allocation games," Journal of Economic Theory, Elsevier, vol. 154(C), pages 25-67.
    12. David Bodoff, 2013. "When learning meets salience," Theory and Decision, Springer, vol. 74(2), pages 241-266, February.
    13. Andreas Blume, 2004. "A Learning-Efficiency Explanation of Structure in Language," Theory and Decision, Springer, vol. 57(3), pages 265-285, November.
    14. He, Simin & Wu, Jiabin, 2018. "Compromise and Coordination: An Experimental Study," MPRA Paper 84713, University Library of Munich, Germany.
    15. Sean Duffy & Tyson Hartwig & John Smith, 2014. "Costly and discrete communication: an experimental investigation," Theory and Decision, Springer, vol. 76(3), pages 395-417, March.
    16. repec:pit:wpaper:346 is not listed on IDEAS
    17. Andreas Blume & April Franco, 2002. "Learning from failure," Staff Report 299, Federal Reserve Bank of Minneapolis.
    18. Ganna Pogrebna & Pavlo Blavatskyy, 2009. "Coordination, focal points and voting in strategic situations: a natural experiment," IEW - Working Papers 403, Institute for Empirical Research in Economics - University of Zurich.
    19. Subhasish Dugar & Haimanti Bhattacharya, 2008. "The Power of Reasoning: Experimental Evidence," Working Paper Series, Department of Economics, University of Utah 2008_20, University of Utah, Department of Economics.
    20. Luba Petersen, 2014. "Forecast Error Information and Heterogeneous Expectations in Learning-to-Forecast Experiments," Discussion Papers dp14-05, Department of Economics, Simon Fraser University.
    21. Guala, Francesco & Mittone, Luigi, 2010. "How history and convention create norms: An experimental study," Journal of Economic Psychology, Elsevier, vol. 31(4), pages 749-756, August.

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