Information and Beliefs in a Repeated Normal-Form Game
44 Pages Posted: 11 Aug 2008
There are 3 versions of this paper
Information and Beliefs in a Repeated Normal-Form Game
Information and Beliefs in a Repeated Normal-Form Game
Information and Beliefs in a Repeated Normal-Form Game
Abstract
We study beliefs and choices in a repeated normal-form game. In addition to a baseline treatment with common knowledge of the game structure and feedback about choices in the previous period, we run treatments (i) without feedback about previous play, (ii) with no information about the opponent's payoffs and (iii) with random matching. Using Stahl and Wilson's (1995) model of limited strategic reasoning, we classify behavior with regard to its strategic sophistication and consider its development over time. We use belief statements to check for the consistency of subjects' actions with the stated beliefs as well as for the accuracy of their beliefs (relative to the opponent's true choice). In the baseline treatment we observe more sophisticated play as well as more accurate beliefs and more best responses to beliefs over time. We isolate feedback as the main driving force of learning to play strategically and to form beliefs that accurately predict the behavior of the opponent.
Keywords: beliefs, experiments, strategic uncertainty, learning
JEL Classification: C72, C92, D84
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Behavioral Game Theory: Thinking, Learning and Teaching
By Colin Camerer, Teck Ho, ...
-
Cognition and Behavior in Two-Person Guessing Games: An Experimental Study
-
Cognition and Behavior in Normal-Form Games: An Experimental Study
By Miguel Costa-gomes, Vincent P. Crawford, ...
-
Detecting Failures of Backward Induction: Monitoring Information Search in Sequential Bargaining
By Eric J. Johnson, Colin Camerer, ...
-
Limited Depth of Reasoning and Failure of Cascade Formation in the Laboratory
By Dorothea Kübler and Georg Weizsacker
-
Learning Dynamics, Lock-In, and Equilibrium Selection in Experimental Coordination Games
-
A Cognitive Hierarchy Theory of One-Shot Games and Experimental Analysis
By Colin Camerer, Teck Ho, ...
-
Ignoring the Rationality of Others: Evidence from Experimental Normal-Form Games
-
Self-Referential Thinking and Equilibrium as States of Mind in Games: Fmri Evidence
By Meghana Bhatt and Colin Camerer