Spiliopoulos, Leonidas (2009): Pattern recognition and subjective belief learning in repeated mixed strategy games.
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Abstract
This paper aspires to fill a conspicuous gap in the existing literature on learning in games, namely the absence of any empirical verification of learning rules involving pattern recognition. An extension of weighted fictitious play is proposed both obeying cognitive laws of subjective perception, and allowing for twoperiod pattern detection of opponents' behavior. The unconditional prior probability of a subject employing a pattern detecting belief model is 0.34, as estimated by a mixture (latentclass) model of the elicited belief and action data series from Nyarko and Schotter (2002), or 0.551 using only action data. The conditional prior probability of using pattern recognition was found to depend positively on a measure of the exploitable twoperiod patterns in an opponent's action choices, in stark contrast to the minimax hypothesis. Also, standard weighted fictitious play models are found to significantly bias memory parameter estimates upwards, compared to the proposed subjective fictitious play models. Finally, simulations of learning models reveal that the simple winstay/loseshift heuristic may be effective even against more complex pattern detecting models.
Item Type:  MPRA Paper 

Institution:  University of Sydney 
Original Title:  Pattern recognition and subjective belief learning in repeated mixed strategy games 
Language:  English 
Keywords:  Behavioral game theory; Learning; Fictitious play; Pattern detection; Simulations; Beliefs; Repeated games; Mixed Strategy Nash equilibria; Economics and psychology; Agent based computational economics 
Subjects:  C  Mathematical and Quantitative Methods > C9  Design of Experiments C  Mathematical and Quantitative Methods > C6  Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C63  Computational Techniques ; Simulation Modeling C  Mathematical and Quantitative Methods > C7  Game Theory and Bargaining Theory > C73  Stochastic and Dynamic Games ; Evolutionary Games ; Repeated Games C  Mathematical and Quantitative Methods > C7  Game Theory and Bargaining Theory > C72  Noncooperative Games 
Item ID:  16169 
Depositing User:  Leonidas Spiliopoulos 
Date Deposited:  17. Jul 2009 00:20 
Last Modified:  11. Feb 2013 10:43 
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URI:  https://mpra.ub.unimuenchen.de/id/eprint/16169 
Available Versions of this Item

Do repeated game players detect patterns in opponents? Revisiting the Nyarko & Schotter belief elicitation experiment. (deposited 09. Jan 2008 01:39)
 Pattern recognition and subjective belief learning in repeated mixed strategy games. (deposited 17. Jul 2009 00:20) [Currently Displayed]