EconPapers    
Economics at your fingertips  
 

A behavioral model for mechanism design: Individual evolutionary learning

Jasmina Arifovic () and John Ledyard

Journal of Economic Behavior & Organization, 2011, vol. 78, issue 3, 374-395

Abstract: Abstract We are interested in how Groves-Ledyard mechanisms perform when used repeatedly in a sequence of one-shot games where agents know only their own preferences. In particular, how fast do the mechanisms converge to the stage game Nash equilibrium and how does that speed of convergence depend on the mechanism parameter [gamma]. Prior theoretical and experimental work provide little guidance. Neither do existing behavioral models designed for small games with a small finite number of strategies. For example, even though experience weighted attraction learning is very successful in modeling behavior in one-shot games with very small, finite strategy spaces, it is not successful in modeling behavior in repeated games with a continuum strategy space unless one wants to be involved in fine tuning. We provide a behavioral model, individual evolutionary learning. The time to first convergence is predicted to be smooth and U-shaped in [gamma]. These predictions are robust to a wide range of parameter values. To test the IEL predictions, we ran our own experiments at the California Institute of Technology. Qualitatively, the data from those experiments are consistent with the IEL predictions about convergence and the U-shaped curve. Quantitatively, the human subjects are a little faster, a little less stable, and slightly less efficient than IEL. But for [gamma]Â =Â 50 and 100, the differences between humans and IEL are very small.

Keywords: Learning; Experiment; Public; goods; Mechanism; design (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268111000515
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:78:y:2011:i:3:p:374-395

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Haili He ().

 
Page updated 2020-09-11
Handle: RePEc:eee:jeborg:v:78:y:2011:i:3:p:374-395