American Economic Review Vol. 88 No. 4 1998
Predicting How People Play Games: Reinforcement Learning in Experimental Games with Unique, Mixed Strategy Equilibria
Abstract
We examine learning in all experiments we could locate involving 100 periods or more of games with a unique equilibrium in mixed strategies, and in a new experiment. We study both the ex post ("best fit") descriptive power of learning models, and their ex ante predictive power, by simulating each experiment using parameters estimated from the other experiments. Even a one-parameter reinforcement learning model robustly outperforms the equilibrium predictions. Predictive power is improved by adding "forgetting" and "experimentation," or by allowing greater rationality as in probabilistic fictitious play. Implications for developing a low-rationality, cognitive game theory are discussed.
- Volume
- 88
- Issue
- 4
- Pages
- 848-881
- Sources
- bibtex:phds-export.bib