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Testing the TASP: An Experimental Investigation of Learning in Games with Unstable Equilibria

Timothy Cason (), Daniel Friedman () and Ed Hopkins

Purdue University Economics Working Papers from Purdue University, Department of Economics

Abstract: We report experiments designed to test between Nash equilibria that are stable and unstable under learning. The “TASP” (Time Average of the Shapley Polygon) gives a precise prediction about what happens when there is divergence from equilibrium under a wide class of learning processes. We study two versions of Rock-Paper-Scissors with the addition of a fourth strategy, Dumb. The unique Nash equilibrium places a weight of 1/2 on Dumb in both games, but in one game the NE is stable, while in the other game the NE is unstable and the TASP places zero weight on Dumb. Consistent with TASP, we find that the frequency of Dumb is lower and play is further from Nash in the high payoff unstable treatment than in the other treatments. However, the frequency of Dumb is substantially greater than zero in all treatments.

Keywords: games; experiments; TASP; learning; unstable; mixed equilibrium; fictitious play (search for similar items in EconPapers)
JEL-codes: C72 C73 C92 D83 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-exp, nep-gth and nep-hpe
Date: 2010-04
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Journal Article: Testing the TASP: An experimental investigation of learning in games with unstable equilibria (2010) Downloads
Working Paper: Testing the TASP: An Experimental Investigation of Learning in Games with Unstable Equilibria (2009) Downloads
Working Paper: Testing the TASP: An Experimental Investigation of Learning in Games with Unstable Equilibria (2009) Downloads
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