Preferences-Dependent Learning in the Centipede Game

52 Pages Posted: 9 Oct 2015

See all articles by Astrid Gamba

Astrid Gamba

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS)

Tobias Regner

Universität Jena

Date Written: October 9, 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.

Keywords: social preferences, learning, self-confirming equilibrium, experiment

JEL Classification: C71, C73, C91, D83

Suggested Citation

Gamba, Astrid and Regner, Tobias, Preferences-Dependent Learning in the Centipede Game (October 9, 2015). University of Milan Bicocca Department of Economics, Management and Statistics Working Paper No. 311, Available at SSRN: https://ssrn.com/abstract=2671779 or http://dx.doi.org/10.2139/ssrn.2671779

Astrid Gamba (Contact Author)

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS) ( email )

Tobias Regner

Universität Jena ( email )

Carl-Zeiss-Str. 3
Jena, 07743
Germany

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