Language: 日本語 English

dominant strategy

Author(s): 
Ai Takeuch, Yukihiko Funaki, Mamoru Kaneko, and J. Jude Kline
Date: 
Sat, 2010-03-20
Abstract: 
We conduct an experimental study on behavior and underlying cognition in prisoner’s
dilemmas with/without role-switching from the viewpoint of inductive game
theory. Subjects start with no knowledge about his and the other’s payoffs, and
learn them through repeated play. In cases with no role-switching, a large proportion
of subjects adopt a dominant strategy. In the cases with role-switching, where
the subjects alternate positions (row and column players), the prediction by inductive
game theory that they will choose the pair of actions maximizing the simple
sum of payoffs is observed for various pairs. We study their behaviors and cognitions
from various different viewpoints. The study suggests a strong implication
about certain foundational assumptions of inductive game theory: In particular,
statistical hypothesis tests are not only used to analyze the experimental data but
also play more positive roles for inductive game theory.
Author(s): 
Naoko Nishimura, Timothy N. Cason, Tatsuyoshi Saijo, Yoshikazu Ikeda
Date: 
Mon, 2007-10-01
Abstract: 

The paper presents a complete information model of bidding in second price sealed bid and ascending price (English) auctions, in which potential buyers know the unit valuation of other bidders and may spitefully prefer that their rivals earn a lower surplus. Bidders with spiteful preferences should overbid in equilibrium when they know their rival has a higher value than their own, and bidders with a higher value underbid to "counter" spite the overbidding of the lower value bidders. The model also predicts different bidding behavior in second price as compared to ascending price auctions. The paper also presents experimental evidence broadly consistent with the model. In the complete information environment, lower value bidders overbid more than higher value bidders, and they overbid more frequently in the second price auction than in the ascending price auction. Overall, the lower value bidder submits bids that exceed value about half the time. These patterns are not found in the incomplete information environment, consistent with the model.