SFB 303 Discussion Paper No. B - 362

Author: Tang, Fang-Fang
Title: Anticipatory Learning in Two-Person Games: An Experimental Study
Part I. Equilibrium and Stability
Abstract: This paper reports the results of experiments designed on the basis of Selten's (1991) anticipatory learning theory, being divided into three parts, with part I on equilibrium and stability, part II on individual analysis and part III on learning. The rest of this paper (part I) consists of seven sections. Section 1.2 lays out the game design for the experiments, specifically, the three 3x3 bimatrix games with their different theoretical properties. Section 1.3 describes the experimental procedure. Section 1.4 outlines the main features of the experimental results in general. Section 1.5 tries to test statistically the Nash equilibrium prediction and what kind of behavioral patterns the subjects exhibit at the sessional, half-sessional and 10-round aggregate data level. The sharp contrast exhibited in the data patterns between the stable case and the unstable case already appears in this section. Section 1.6 tries to test statistically the Selten stability prediction which is reflected in another way as the qualitative difference of the behavior patterns between the sessions and within the sessions, i.e., the distance between the sessional relative frequencies and the choice frequency path seems significantly closer and smoother in the stable case than in the unstable case. Section 1.7 concludes by summarizing the main results and pointing out some open questions. Our data and statistical results lend supportive evidence to Selten's stability prediction from different angles, but none of the Nash equilibrium points has been hit by our subjects. Stability does not seem to be insurmountably unpredictable but the irregularities shown at the finer data levels seem to be at least as equally puzzling as in other experimental studies such as in O'Neill (1987).
Creation-Date: March 1996
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