An experimental investigation of stochastic adjustment dynamics
Wooyoung Lim () and
Philip R. Neary
Games and Economic Behavior, 2016, vol. 100, issue C, 208-219
This paper describes an experiment designed to test which, if any, stochastic adjustment dynamic most accurately captures the behaviour of a large population. The setting is a large population coordination game, the Language Game of Neary (2012), in which actions are strategic complements and two homogeneous groups have differing preferences over equilibria. We find that subject behaviour is highly consistent with the myopic best-response learning rule with deviations from this rule that are (i) dependent on the myopic best-response payoff but not on the deviation payoff, and (ii) directed in the sense of being group-dependent. We also find a time trend to deviations, with the magnitude tapering off as time progresses. This is in contrast to much of the theoretical literature that supposes a variety of other specifications of learning rules and both time-independent and payoff-dependent explanations for deviations.
Keywords: Stochastic adjustment dynamics; Experiment; The Language Game; Evolutionary game theory (search for similar items in EconPapers)
JEL-codes: C72 C73 C92 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:100:y:2016:i:c:p:208-219
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