How You Learn Depends on When You Learn: Experimental Evidence From Cournot Contests

47 Pages Posted: 17 Oct 2017 Last revised: 19 Feb 2019

See all articles by Peiran Jiao

Peiran Jiao

Maastricht University - Department of Finance

Heinrich H. Nax

ETH Zürich; University of Zurich

Date Written: May 24, 2018

Abstract

We conducted controlled laboratory experiments to investigate how humans adapt the decision rule (DR) they use in repeated strategic interactions in light of new information becoming available. We do so by providing -- along different paths -- more and more information over time, so as to trigger adoption and abandonment of different DRs along the way. We focus on 'Cournot contest' games and consider the three leading DRs in game theory: payoff-based learning, best-response, and imitation. Our study reveals path dependence in how people use heuristics in strategic decision-making, falsifying the salient assumption that DRs are triggered by the available information alone.

Keywords: Learning, Imitation, Best-Response, Information, Cournot Competition, Heuristics, Cooperation

JEL Classification: C72, C92, D83

Suggested Citation

Jiao, Peiran and Nax, Heinrich H., How You Learn Depends on When You Learn: Experimental Evidence From Cournot Contests (May 24, 2018). Available at SSRN: https://ssrn.com/abstract=3053958 or http://dx.doi.org/10.2139/ssrn.3053958

Peiran Jiao (Contact Author)

Maastricht University - Department of Finance ( email )

Maastricht, 6200 MD
Netherlands

Heinrich H. Nax

ETH Zürich ( email )

Rämistrasse 101
ZUE F7
Zürich, 8092
Switzerland

University of Zurich ( email )

Rämistrasse 71
Zürich, CH-8006
Switzerland

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