Little Information, Efficiency, and Learning - An Experimental Study

Abstract

Earlier experiments have shown that under little information subjects are hardly able to coordinate even though there are no conflicting interests and subjects are organised in fixed pairs. This is so, even though a simple adjustment process would lead the subjects into the efficient, fair and individually payoff maximising outcome. We draw on this finding and design an experiment in which subjects re-peatedly play 4 simple games within 4 sets of 40 rounds under little information. This way we are able to investigate (i) the coordination abilities of the subjects depending on the underlying game, (ii) the resulting efficiency loss, and (iii) the adjustment of the learning rule.mutual fate control, matching pennies, fate-control behaviour- control, learning, coordination, little information