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632
A theory of fairness, competition and cooperation
 Quarterly Journal of Economics
, 1999
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Experienceweighted Attraction Learning in Normal Form Games
 ECONOMETRICA
, 1999
"... We describe a general model, `experienceweighted attraction' (EWA) learning, which includes reinforcement learning and a class of weighted fictitious play belief models as special cases. In EWA, strategies have attractions which reflect prior predispositions, are updated based on payoff experi ..."
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Cited by 271 (25 self)
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We describe a general model, `experienceweighted attraction' (EWA) learning, which includes reinforcement learning and a class of weighted fictitious play belief models as special cases. In EWA, strategies have attractions which reflect prior predispositions, are updated based on payoff experience, and determine choice probabilities according to some rule (e.g., logit). A key feature is a parameter delta which weights the strength of hypothetical reinforcement of strategies which were not chosen according to the payoff they would have yielded. When delta = 0 choice reinforcement results. When delta = 1, levels of reinforcement of strategies are proportional to expected payoffs given beliefs based on past history. Another key feature is the growth rates of attractions. The EWA model controls the growth rates by two decay parameters, phi and rho, which depreciate attractions and amount of experience separately. When phi = rho, beliefbased models result; when rho = 0 choice reinforcement results. Using three data se...
Cognition and Behavior in TwoPerson Guessing games
 An Experimental Study’, American Economic Review
, 2006
"... This paper reports an experiment that elicits subjects ’ initial responses to 16 dominancesolvable twoperson guessing games. The structure is publicly announced except for varying payoff parameters, to which subjects are given free access. Varying the parameters allows very strong separation of th ..."
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Cited by 185 (18 self)
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This paper reports an experiment that elicits subjects ’ initial responses to 16 dominancesolvable twoperson guessing games. The structure is publicly announced except for varying payoff parameters, to which subjects are given free access. Varying the parameters allows very strong separation of the behavior implied by leading decision rules. Subjects ’ decisions and searches show that most subjects understood the games and sought to maximize payoffs, but many had simplified models of others ’ decisions that led to systematic deviations from equilibrium. The predictable component of their deviations is well explained by a structural nonequilibrium model of initial responses based on levelk thinking. (JEL C72, C92, D83)... professional investment may be likened to those newspaper competitions in which the competitors have to pick out the six prettiest faces from a hundred photographs, the prize being awarded to the competitor whose choice most nearly corresponds to the average preferences of the competitors as a whole; so that each competitor has to pick, not those faces which he himself finds prettiest, but those which he thinks likeliest to catch the fancy of the other competitors, all of whom are looking at the problem from the same point of view. It is not a case of choosing those which, to the best of one’s judgment, are really the prettiest, nor even those which average opinion genuinely thinks the prettiest. We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practice the fourth, fifth, and higher degrees.
Heterogeneous agent models in economics and finance
 IN HANDBOOK OF COMPUTATIONAL ECONOMICS (EDS
, 2005
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COMPUTATION OF EQUILIBRIA in Finite Games
, 1996
"... We review the current state of the art of methods for numerical computation of Nash equilibria for nitenperson games. Classical path following methods, such as the LemkeHowson algorithm for two person games, and Scarftype fixed point algorithms for nperson games provide globally convergent metho ..."
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Cited by 148 (1 self)
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We review the current state of the art of methods for numerical computation of Nash equilibria for nitenperson games. Classical path following methods, such as the LemkeHowson algorithm for two person games, and Scarftype fixed point algorithms for nperson games provide globally convergent methods for finding a sample equilibrium. For large problems, methods which are not globally convergent, such as sequential linear complementarity methods may be preferred on the grounds of speed. None of these methods are capable of characterizing the entire set of Nash equilibria. More computationally intensive methods, which derive from the theory of semialgebraic sets are required for finding all equilibria. These methods can also be applied to compute various equilibrium refinements.
Ten little treasures of game theory and ten intuitive contradictions
 AMERICAN ECONOMIC REVIEW
, 2001
"... This paper reports laboratory data for games that are played only once. These games span the standard categories: static and dynamic games with complete and incomplete information. For each game, the treasure is a treatment in which behavior conforms nicely to predictions of the Nash equilibrium or ..."
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Cited by 142 (8 self)
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This paper reports laboratory data for games that are played only once. These games span the standard categories: static and dynamic games with complete and incomplete information. For each game, the treasure is a treatment in which behavior conforms nicely to predictions of the Nash equilibrium or relevant refinement. In each case, however, a change in the payoff structure produces a large inconsistency between theoretical predictions and observed behavior. These contradictions are generally consistent with simple intuition based on the interaction of payoff asymmetries and noisy introspection about others’ decisions.
A cognitive hierarchy model of games
 Quarterly Journal of Economics
"... Players in a game are “in equilibrium ” if they are rational, and accurately predict other players ’ strategies. In many experiments, however, players are not in equilibrium. An alternative is “cognitive hierarchy ” (CH) theory, where each player assumes that his strategy is the most sophisticated. ..."
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Cited by 110 (6 self)
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Players in a game are “in equilibrium ” if they are rational, and accurately predict other players ’ strategies. In many experiments, however, players are not in equilibrium. An alternative is “cognitive hierarchy ” (CH) theory, where each player assumes that his strategy is the most sophisticated. The CH model has inductively defined strategic categories: step 0 players randomize; and step k thinkers bestrespond, assuming that other players are distributed over step 0 through step k � 1. This model fits empirical data, and explains why equilibrium theory predicts behavior well in some games and poorly in others. An average of 1.5 steps fits data from many games. I.
Quantal Response Equilibrium and Overbidding in PrivateValue Auctions
 Journal of Economic Theory
, 2002
"... This paper reports the results of a privatevalues auction experiment in which expected costs of deviating from the Nash equilibrium bidding function are asymmetric, with the implication that upward deviations will be more likely in one treatment than in the other. Overbidding is observed in both tr ..."
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Cited by 109 (21 self)
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This paper reports the results of a privatevalues auction experiment in which expected costs of deviating from the Nash equilibrium bidding function are asymmetric, with the implication that upward deviations will be more likely in one treatment than in the other. Overbidding is observed in both treatments, but is more prevalent in the treatment where the costs of overbidding are lower. We specify and estimate a noisy (quantal response) model of equilibrium behavior. Estimated noise and risk aversion parameters are highly significant and consistent across treatments. The resulting twoparameter model tracks both the average bids and the distribution of bids remarkably well. Alternative explanations of overbidding are also considered. The estimates of parameters from a nonlinear probability weighting function yield a formulation that is essentially equivalent to risk aversion in this context. A model in which players experience a "joy of winning " provides a reasonable fit of the data but does significantly worse than the risk aversion model. 1.