Learning (Not) To Yield: An Experimental Study of Evolving Ultimatum Game Behavior

Whether behavior converges toward rational play or fair play in repeated ultimatum games depends on which player yields first. If responders concede first by accepting low offers, proposers would not need to learn to offer more, and play would converge toward unequal sharing. By the same token, if proposers learn fast that low offers are doomed to be rejected and adjust their offers accordingly, pressure would be lifted from responders to learn to accept such offers. Play would converge toward equal sharing. Here we tested the hypothesis that it is regret-both material and strategic-which determines how players modify their behavior. We conducted a repeated ultimatum game experiment with random strangers, in which one treatment does and another does not provide population feedback in addition to informing players about their own outcome. Our results show that regret is a good predictor of the dynamics of play. Specifically, we will turn to the dynamics that unfold when players make repeated decisions in the ultimatum game with randomly changing opponents, and when they learn not only about their own outcome in the previous round but also find out how the population on average has adapted to previous results (path dependence).Ultimatum bargaining game, Reputation, Regret, Learning, Experiment

Taking the sting out of choice: Diversification of investments

It is often the case that one can choose a mix of alternative options rather than have to select one option only. Such an opportunity to diversify may blunt the risk involved in all-or-none choice. Here we investigate repeated investment decisions in two-valued options that differ in their riskiness, looking for the effects of recent decisions and their outcomes on upcoming decisions. We compare these effects to those evident in all-or-none choice between the same risky options. The “state of the world”, namely, the likelihood of the high versus the low outcomes of the options, is manipulated. We find that aggregate allocation diverges from uniformity (i.e., from 1/n), and is sensitive to outcome probabilities, with the pattern of results indicating reactivity to the outcome of the previous decision. Round-to-round dynamics reveal that the outcome of the previous decision has an effect on the subsequent decision, on top of inertia; the aspects of the outcome that influence the next decision indicate an effect of a missed opportunity, if there was one, in the previous decision. Importantly, recent outcomes have a similar effect in diversification decisions and in all-or-none choice

Is that the answer you had in mind? The effect of perspective on unethical behavior

We explored how the perspective through which individuals view their actions influences their ethicality, comparing a narrow perspective that allows for evaluation of each choice in isolation, to a broad perspective that promotes an aggregate view of one’s choices. To examine unethical behavior we employed a computerized variation of a trivia game that challenges the player’s integrity because, rather than choosing the correct answer, players indicate whether the correct highlighted answer is the answer they had in mind. In Experiment 1 perspective was modified through the choice procedure: broad perspective evoked by an aggregate decision regarding the upcoming test items and narrow perspective evoked by a segregated decision regarding each upcoming test item. In Experiment 2 perspective was evoked through differential priming. Across both experiments, when given a monetary incentive to succeed, the adoption of a narrow perspective increased cheating, as evidenced by overall higher reported success rates

Experimental Research on Contests

Costly competitions between economic agents are modeled as contests. Researchers use laboratory experiments to study contests and test comparative static predictions of contest theory. Commonly, researchers find that participants’ efforts are significantly higher than predicted by the standard Nash equilibrium. Despite overbidding, most comparative static predictions, such as the incentive effect, the size effect, the discouragement effect and others are supported in the laboratory. In addition, experimental studies examine various contest structures, including dynamic contests (such as multi-stage races, wars of attrition, tug-of-wars), multi-dimensional contests (such as Colonel Blotto games), and contests between groups. This article provides a short review of such studies

The Parasite Game: Exploiting the Abundance of Nature in Face of Competition

A situation in which the regularity in nature can be utilized while competition is to be avoided is modelled by the Parasite game. In this game regular behaviour could enhance guessing nature but strategic randomization is required to avoid being outguessed. In an experiment, 60 pairs of participants (partner design) played many rounds of the Parasite game. The treatments differed in nature’s probabilities and whether or not these probabilities were announced in advance or could only be experienced over time. Before playing, the working memory (WM) of participants was measured. Data analyses test the correspondence of participants behavior to game-theoretic benchmarks and the effect of participants’ WM on their behavior

Predating Predators

Predating predators requires at least three specimen to which we refer as players 1, 2, and 3. Player 1 has simply to guess nature when trying to find food. Player 2 is hunting player 1 in the hope that 1 is well-fed but must also avoid being hunted by player 3. One major motivation is to test three benchmark solutions (uniformly perfect, impulse balance and payoff balance equilibrium) in such a complex strategic setting. In the experiment three participants play repeatedly the game (partner design) which allows to test whether certain types of behavior are just initial inclinations or stable patterns which survive learning and experience

Distribution of Resources in a Competitive Environment

When two agents of unequal strength compete, the stronger one is expected to always win the competition. This expectation is based on the assumption that evaluation of performance is flawless. If, however, the agents are evaluated on the basis of only a small sample of their performance, the weaker agent still stands a chance of winning occasionally. A theoretical analysis indicates that for this to happen, the weaker agent must introduce variability into the effort he or she invests in the behavior, such that on some occasions the weaker agent's level of performance is as high as that of the stronger agent, whereas on others it is null. This, in turn, would drive the stronger agent to introduce variability into his or her behavior. We model this situation in a game, present its game-theoretic solution, and report an experiment, involving 144 individuals, in which we tested whether players are actually sensitive to their relative strengths and know how to allocate their resources given those relative strengths. Our results indicate that they do.

Age-related differences in strategic competition

Understanding how people of different ages decide in competition is a question of theoretical and practical importance. Using an experimental laboratory approach, this research investigates the ability of younger and older adults to think and act strategically with equal or unequal resources. In zero-sum games of resource allocation, younger adults (19-35 years) and older adults (65-81 years) made strategic decisions in competition against opponents of a similar age (Study 1; N = 120) or different age (Study 2; N = 120). The findings highlight people's ability to make good interpersonal decisions in complex scenarios: Both younger and older adults were aware of their relative strength (in terms of material resources) and allocated their resources adaptively. When competing against opponents of a similar age, people's gains were in line with game-theoretic predictions. However, younger adults made superior strategic allocations and won more frequently when competing against older adults. Measures of fluid cognitive and numerical abilities correlated with strategic behavior in interpersonal competition