Predicting how People Play Games: a Simple Dynamic Model of Choice

R. Sarin and Farshid Vahid

No 12/99, Monash Econometrics and Business Statistics Working Papers from Monash University, Department of Econometrics and Business Statistics

Abstract: We use the model developed in Sarin and Vahid (1999, GEB) to explain the experiments reported in Erev and Roth (1998, AER). The model supposes that players maximize subject to their "beliefs" which are non-probabilistic and scalar-valued. They are intended to describe the payoffs the players subjectively assess they will obtain from a strategy. In an earlier paper (Sarin and Vahid (1997) we showed that the model predicted behaviour in repeated coordination games remarkably well, and better than equilibrium theory of reinforcement learning models. In this paper we show that the same one-parameter model can also explain behaviour in games with a unique mixed strategy Nash equilibrium better than alternative models. Hence, we obtain further support for the simple dynamic model.

Keywords: Game Theory; Probability (search for similar items in EconPapers)
JEL-codes: C60 C70 (search for similar items in EconPapers)
Pages: 19 pages
Date: 1999-10
New Economics Papers: this item is included in nep-exp and nep-gth
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Citations: View citations in EconPapers (5)

Published in Games and Economic Behavior (2001), 34, 104-122.

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Journal Article: Predicting How People Play Games: A Simple Dynamic Model of Choice (2001)
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