An experimental investigation of stochastic adjustment dynamics. / Lim, Wooyoung; Neary, Philip.

In: Games and Economic Behavior, Vol. 100, 11.2016, p. 208–219.

Research output: Contribution to journalArticle

Published

Documents

Links

Abstract

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 in which two different 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.
Original languageEnglish
Pages (from-to)208–219
Number of pages12
JournalGames and Economic Behavior
Volume100
Early online date4 Oct 2016
DOIs
Publication statusPublished - Nov 2016
This open access research output is licenced under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

ID: 26998428