Quarterly Review 2422

Back to Publication

Learning to Be Unpredictable: An Experimental Study

Arijit Mukherji
David E. Runkle - Senior Economist

Spring 2000

Abstract
This study tests experimentally whether the ability of subjects to play a noncooperative game’s mixed-strategy equilibrium (to make their play unpredictable) is affected by how much information subjects have about the structure of the game. Subjects played the mixed-strategy equilibrium when they had all the information about other players’ payoffs and actions, but not otherwise. Previous research has shown that players of a game can play a mixed-strategy equilibrium if they observe the actions of all players and use sophisticated Bayesian learning to infer the likely payoffs to other players. The result of this study suggests that the subjects in our experiments did not use sophisticated Bayesian learning. The result also suggests that economists should be careful about assuming in their models that people can easily infer everyone else’s payoffs.


Download Paper (PDF)

 
Latest

President's Speech: Clarifying the Objectives of Monetary Policy