Working Paper: CEPR ID: DP14088
Authors: Bernardo Garcapola; Nagore Iriberri
Abstract: Naive, non-equilibrium, behavioral rules, compared to more sophisticatedequilibrium theory, are often better in describing individuals' initial play ingames. Additionally, in repeated play in games, when individuals have the opportunity to learn about their opponents' past behavior, learning models of different sophistication levels are successful in explaining how individuals modify their behavior in response to feedback. How do subjects following different behavioral rules in initial play modify their behavior after learning about past behavior? This study links both initial and repeated play in games, analyzing elicited behavior in 3x3 normal-form games using a within-subject laboratory design. We classify individuals into different behavioral rules in both initial and repeated play and test whether and/or how naivete and sophistication in initial play correlates with naivete and sophistication in repeated play. We find no evidence for a correlation between naivete and sophistication in initial and repeated play.
Keywords: naivete; sophistication; initial play; repeated play; level-k thinking; adaptive and sophisticated learning; mixture-of-types estimation
JEL Codes: C70; C91; C92
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| naive nonequilibrium behavioral rules (D91) | initial play (Y20) |
| initial play (Y20) | learning models in repeated play (C73) |
| strategic naivete in initial responses (F52) | sophisticated learning models in repeated play (C73) |