SFB 504 discussion paper No. 02-17:

Reinforcement, repeated games, and local interaction

Oliver Kirchkamp and Rosemarie Nagel

Abstract:

We investigate and compare different approaches to derive strategies from laboratory data in prisoners' dilemmas experiments. While theory suggests more cooperation in spatial structures than in spaceless ones, we find in our experiments either the opposite or no difference. In this paper we investigate to which degree learning and reinforcement explains this dependence on structure and information. Starting from a very simple model we gradually develop a setup where players use repeated game strategies and choose among these strategies using a simple reinforcement rule. We then measure to which degree this model explain players' behaviour.

JEL-Classification: C72, C92, D74, D83, H41, R12

Keywords: Local interaction, experiments, prisoner's dilemma, reinforcement, repeated games.


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