On the beliefs off the path: Equilibrium refinement due to quantal response and level-k

• 成果类型: Article
• 署名作者: Breitmoser, Yves; Tan, Jonathan H. W.; Zizzo, Daniel John
• 署名单位: Humboldt University of Berlin; University of Nottingham; University of East Anglia; University of East Anglia
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2014.03.002
• 发表日期: 2014
• 页码: 102-125
• 关键词: Incomplete information; equilibrium refinement; Logit equilibrium; rationalizability; quantal response; Level-k; inequity aversion; experiment

摘要

The extensive form game we study has multiple perfect equilibria, but it has a unique limiting logit equilibrium (QRE) and a unique level-k prediction as k approaches infinity. The convergence paths of QRE and level-k are different, but they converge to the same limit point. We analyze whether subjects adapt beliefs when gaining experience, and if so whether they take the QRE or the level-k learning path. We estimate transitions between level-k and QRE belief rules using Markov-switching rule learning models. The analysis reveals that subjects take the level-k learning path and that they advance gradually, switching from level 1 to 2, from level 2 to equilibrium, and reverting to level 1 after observing opponents deviating from equilibrium. The steady state therefore contains a mixture of behavioral rules: levels 0, 1, 2, and equilibrium with weights of 2.9%, 16.6%, 37.9%, and 42.6%, respectively. (C) 2014 The Authors. Published by Elsevier Inc. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/3.0/).