Learning and sophistication in coordination games

Abstract

This paper studies the role of strategic teaching in coordination games and whether changing the incentives of players to teach leads to more efficient coordination. We ran experiments where subjects played one of four coordination games in constant pairings, where the incentives to teach were varied along two dimensions -the short run cost of teaching and the long run benefit to teaching. We show which aspects of the game lead subjects to adopt long run teaching strategies, and show that subjects try to manipulate their opponent's actions to pull them out of a situation of coordination failure. We also show that extending a model of decision making by introducing a forward-looking component helps to track teachers' behaviour more accurately, and describes the way players behave in a more unified way across both teachers and learners.

Learning, teaching, and turn taking in the repeated assignment game

“…The use of elicited beliefs raises potential concerns, however, such as incentives for hedging and measurement noise because beliefs are deliberately not strongly-incentivized (Hyndman et al, 2009). Besides looking at the different questions of teaching history-dependent strategies and teaching across different supergames, our study complements this earlier work by providing more direct evidence of teaching.…”

“…Most of this small, emerging literature focuses on how repetition affects the adoption of a particular Nash equilibrium in the one-shot game Hyndman et al, 2009Hyndman et al, , 2012. Most applications of repeated game models, however, consider how players can use history-dependent strategies to support cooperation (see, for example, Mailath and Samuelson (2006) for a survey).…”

“…Our study focuses on teaching history-dependent repeated game strategies across different matches of supergames, and differs from the recent work of Terracol and Vaksmann (2009), and Hyndman et al (2009, who focus on how finite repetition affects the adoption of a particular Nash equilibrium of the stage game. Hyndman et al (2012) consider repeated play in two games with unique pure strategy Nash equilibria, and they observe some subjects teaching others to play the Nash equilibrium when they choose Nash equilibrium actions that are not best responses to their own reported beliefs.…”

“…Terracol and Vaksmann (2009) find that in their asymmetric game, the players who have more to gain from teaching others to play a preferred equilibrium are more likely to teach. Hyndman et al (2009) manipulate the costs and benefits of teaching, and they find that teaching is more likely in their low cost-high benefit treatment.…”

“…In these studies it is natural to use elicited beliefs to measure teaching, because either multiple equilibria exist in the stage games Hyndman et al, 2009), or there is no dominant strategy in the stage game (Hyndman et al, 2012). The use of elicited beliefs raises potential concerns, however, such as incentives for hedging and measurement noise because beliefs are deliberately not strongly-incentivized (Hyndman et al, 2009).…”