EXPERIENTIA DOCET: PROFESSIONALS PLAY MINIMAX IN LABORATORY EXPERIMENTS

Ignacio Palacios-Huerta () and Oscar Volij
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Oscar Volij: Department of Economics, Iowa State University., http://volij.co.il/

Economic theory and game theory from Oscar Volij

Abstract: We study how professional players and college students play zero-sum two-person strategic games in a laboratory setting. We first ask professionals to play a 2x2 game that is formally identical to a strategic interaction situation that they face in their natural environment. Consistent with their behavior in the field, they play very close to the equilibrium of the game. In particular, (i) they equate their strategies' payoffs to the equilibrium ones, and (ii) they generate sequences of choices that are serially independent. In sharp contrast, however, we find that college students play the game far from the equilibrium predictions. We then study the behavior of professional players and college students in the classic O'Neill's 4x4 zero-sum game, a game that none of the subjects have encountered previously, and find the same differences in the behavior of these two pools of subjects. The transfer of skills and experience from the familiar field to the unfamiliar laboratory observed for professional players is relevant to evaluate the circumstances under which behavior in a laboratory setting may be a reliable indicator of behavior in a naturally occurring setting. From a cognitive perspective, it is useful for research on recognition processes, intuition, and similarity as a basis for inductive reasoning.

Keywords: Laboratory Experiments; Minimax; Experience; Cognition. (search for similar items in EconPapers)

Published in Econometrica,76(1), 71-115, 2008.

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Related works:
Working Paper: Experientia Docet: Professionals Play Minimax in Laboratory Experiments (2006)
Journal Article: Experientia Docet: Professionals Play Minimax in Laboratory Experiments (2008)
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