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JENA ECONOMIC
RESEARCH PAPERS
# 2015 – 012
Preferences-dependent learning in the Centipede game
by
Astrid Gamba
Tobias Regner
www.jenecon.de
ISSN 1864-7057
The JENA ECONOMIC RESEARCH PAPERS is a joint publication of the Friedrich
Schiller University Jena, Germany. For editorial correspondence please contact
markus.pasche@uni-jena.de.
Impressum:
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© by the author.
Jena Economic Research Papers 2015 - 012
Preferences-dependent learning in the
Centipede game
Astrid Gamba
a
b
a∗
Tobias Regner
b
University of Milan-Bicocca, Milan, Italy
University of Jena and Max Planck Institute of Economics, Jena, Germany
August 5, 2015
Abstract
We study experimentally whether heterogeneity of behavior in the Centipede game can be interpreted as the result of a learning process of individuals with different preference types (more and less pro-social) and coarse information regarding the opponent’s past behavior. We manipulate the quality
of information feedbacks provided after each play. If subjects rely only on
their personal database, long run behavior resembles a Self-confirming equilibrium whereby less pro-social types take at earlier nodes due to prediction
errors. Aggregate information release decreases heterogeneity of behavior by
increasing the passing rates of pro-selfs and play moves towards Bayesian
Nash equilibrium.
JEL classifications: C71, C73, C91, D83
Keywords: social preferences, learning, Self-confirming equilibrium, experiment
∗
Corresponding author (Department of Economics, Management and Statistics, University of
Milan-Bicocca, Piazza dell’Ateneo Nuovo 1, 2016, Milan, Italy. Phone: +390264483092. E-mail:
astrid.gamba@unimib.it).
1
Jena Economic Research Papers 2015 - 012
1
Introduction
In many strategic interactions, the level of uncertainty that players face about the
opponent’s behavior might...