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The reinforcement heuristic in normal form games


Alós-Ferrer, Carlos; Ritschel, Alexander (2018). The reinforcement heuristic in normal form games. Journal of Economic Behavior & Organization, 152:224-234.

Abstract

We analyze simple reinforcement-based behavioral rules in 3 × 3 games through choice data and response times. We argue that there is a large overlap between reinforcement-based heuristics (win-stay, lose-shift) and the more “rational” behavioral rule of myopic best reply. However, evidence from response times shows that choices in agreement with the common prescription of those rules are comparatively fast, and choices of the form “lose-shift” occur more frequently for larger differences with bygone payoffs. Both observations speak in favor of reinforcement processes as a cognitive shortcut for apparent myopic best reply, and advise caution when interpreting behavioral results in favor of optimizing behavior.

Abstract

We analyze simple reinforcement-based behavioral rules in 3 × 3 games through choice data and response times. We argue that there is a large overlap between reinforcement-based heuristics (win-stay, lose-shift) and the more “rational” behavioral rule of myopic best reply. However, evidence from response times shows that choices in agreement with the common prescription of those rules are comparatively fast, and choices of the form “lose-shift” occur more frequently for larger differences with bygone payoffs. Both observations speak in favor of reinforcement processes as a cognitive shortcut for apparent myopic best reply, and advise caution when interpreting behavioral results in favor of optimizing behavior.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Scopus Subject Areas:Social Sciences & Humanities > Economics and Econometrics
Social Sciences & Humanities > Organizational Behavior and Human Resource Management
Uncontrolled Keywords:Reinforcement, myopic best reply, response times, decision processes
Language:English
Date:August 2018
Deposited On:20 Jul 2018 13:48
Last Modified:16 Mar 2022 08:05
Publisher:Elsevier
ISSN:0167-2681
OA Status:Green
Publisher DOI:https://doi.org/10.1016/j.jebo.2018.06.014
Official URL:https://www.sciencedirect.com/science/article/pii/S0167268118301732

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