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The Two-Person Harvard Game: An Experimental Analysis

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  • Apesteguia, Jose

Abstract

Two subjects have to repeatedly choose between two alternatives, A and B, where payoffs of an A or B-choice depend on the choices made by both players in a number of previous choices. Locally, alternative A gives always more payoff than alternative B. However, in terms of overall payoffs exclusive choice of B is a better strategy. The equilibrium predicted by the theory of melioration is to exclusively play A, while the Nash equilibrium is to almost exclusively play B. The predictive values of such equilibria are analyzed under three different informational conditions. Special attention is paid to the learning processes exhibited by players.

Suggested Citation

  • Apesteguia, Jose, 2001. "The Two-Person Harvard Game: An Experimental Analysis," Bonn Econ Discussion Papers 23/2001, University of Bonn, Bonn Graduate School of Economics (BGSE).
    • Handle: RePEc:zbw:bonedp:232001
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    References listed on IDEAS

    as
    1. Richard J. Herrnstein & Drazen Prelec, 1991. "Melioration: A Theory of Distributed Choice," Journal of Economic Perspectives, American Economic Association, vol. 5(3), pages 137-156, Summer.
    2. Herrnstein, R J, 1991. "Experiments on Stable Suboptimality in Individual Behavior," American Economic Review, American Economic Association, vol. 81(2), pages 360-364, May.
    3. Kudadjie-Gyamfi, Elizabeth & Rachlin, Howard, 1996. "Temporal Patterning in Choice among Delayed Outcomes," Organizational Behavior and Human Decision Processes, Elsevier, vol. 65(1), pages 61-67, January.
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    1. Apesteguia, Jose, 2001. "A Characterization of Melioration in Game Theoretic Frameworks," Bonn Econ Discussion Papers 26/2001, University of Bonn, Bonn Graduate School of Economics (BGSE).

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    More about this item

    Keywords

    Bounded rationality; Psychology; Melioration; Nash equilibrium; Information; Learning;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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