Testing the TASP: An Experimental Investigation of Learning in Games with Unstable Equilibria

Timothy N. Cason , Daniel Friedman, Ed Hopkins

Research output: Contribution to journalArticlepeer-review

Abstract

We report experiments studying mixed strategy Nash equilibria that are theoretically stable or unstable under learning. The Time Average Shapley Polygon (TASP) predicts behavior in the unstable case. We study two versions of Rock Paper Scissors that include a fourth strategy, Dumb. The unique Nash equilibrium is identical in the two games, but the predicted frequency of Dumb is much higher in the game where the NE is stable. Consistent with TASP, the observed frequency of Dumb is lower and play is further from Nash in the high payoff unstable treatment. However, Dumb is played too frequently in all treatments.
Original languageEnglish
Pages (from-to)2309-2331
Number of pages23
JournalJournal of Economic Theory
Volume145
Issue number6
DOIs
Publication statusPublished - Nov 2010

Keywords

  • games
  • experiments
  • TASP
  • learning
  • unstable
  • mixed equilibrium
  • fictitious play

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