The Speed of Learning in Noisy Games: Partial Reinforcement and the Sustainability of Cooperation

By Yoella Bereby-Meyer, Alvin E. Roth. 2006

183 citations recorded by the source corpus.

In an experiment, players? ability to learn to cooperate in the repeated prisoner?s dilemma was substantially diminished when the payoffs were noisy, even though players could monitor one another?s past actions perfectly. In contrast, in one-time play against a succession of opponents, noisy payoffs increased cooperation, by slowing the rate at which cooperation decays. These observations are consistent with the robust observation from the psychology literature that partial reinforcement (adding randomness to the link between an action and its consequences while holding expected payoffs constant) slows learning. This effect is magnified in the repeated game: when others are slow to learn to cooperate, the benefits of cooperation are reduced, which further hampers cooperation. These results show that a small change in the payoff environment, which changes the speed of individual learning, can have a large effect on collective behavior. And they show that there may be interesting comparative dynamics that can be derived from careful attention to the fact that at least some economic behavior is learned from experience. (JEL C71, C72, C73, D83)

Subfields: Management Science and Operations Research, Safety Research, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/62b3be5c97d001f46925408bda6cf3f2a3fdee4d

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Citations in the corpus

Learning and the Economics of Small Decisions (2013, background): “One recent demonstration of the potential value of generality of this approach is the observation that people behave as if they find the act of following advices reinforcing (see Biele et al., 2009). A second approach involves the assertion that people learn among a subset of repeated game strategie”
Cooperation in the Finitely Repeated Prisoner's Dilemma (2018, unknown): “…henceforth, Andreoni & Miller (1993) will be identified as AM1993, Cooper, DeJong, Fosythe & Ross (1996) as CDFR1996, Dal Bó (2005) as DB2005, Bereby-Meyer & Roth (2006) as BMR2006, and Friedman & Oprea (2012) as FO2012. length of the horizon, and decrease with the gain.13 In this sense,…”
Do Investors Overweight Personal Experience? Evidence from IPO Subscriptions (2008, background): “The importance of initial experience has long been recognized in marketing, consistent with what psychologists refer to as the primacy effect (Asch, 1946; see also Bereby-Meyer and Roth, 2006, for an analysis of related issues in strategic games).”
Imperfect Public Monitoring with Costly Punishment - An Experimental Study (2012, unknown): “Bereby-Meyer and Roth (2006) show that players’ ability to learn to cooperate in a repeated prisoner’s dilemma game is substantially diminished when payoffs are noisy, even though in their experiment players could monitor each other’s past actions perfectly.7 In contrast, we find that a small…”