Exploration vs Exploitation, impulse balance equilibrium and a specification test for the el farol bar problem
| dc.contributor.author | Kirman, A. | |
| dc.contributor.author | Laisney, F. | |
| dc.contributor.author | Pezanis-Christou, P. | |
| dc.date.issued | 2018 | |
| dc.description.abstract | The paper reports on market-entry experiments that manipulate both payoff structures and payoff levels to assess two stationary models of behaviour: Exploration vs Exploitation (EvE, which is equivalent to Quantal Response Equilibrium) and Impulse Balance Equilibrium (IBE). These models explain the data equally well in terms of goodness-of-fit whenever the observed probability of entry is less than the symmetric Nash equilibrium prediction; otherwise IBE marginally outperforms EvE. When assuming agents playing symmetric strategies, and estimating the models with session data, IBE yields more theory-consistent estimates than EvE, no matter the payoff structure or level. However, the opposite occurs when the symmetry assumption is relaxed. The conduct of a specification test rejects the validity of the restrictions on entry probabilities imposed by EvE for agents with symmetric strategies, in 50 to 75% of sessions and it always rejects it in the case of IBE, which indicates that the symmetric variant of these models have little empirical support. | |
| dc.description.statementofresponsibility | Alan Kirman, François Laisney, Paul Pezanis-Christou | |
| dc.identifier.issn | 2203-6024 | |
| dc.identifier.orcid | Pezanis-Christou, P. [0000-0001-6521-4139] | |
| dc.identifier.uri | https://hdl.handle.net/2440/138178 | |
| dc.language.iso | en | |
| dc.publisher | School of Economics, The University of Adelaide | |
| dc.relation.grant | http://purl.org/au-research/grants/arc/DP140102949 | |
| dc.relation.ispartofseries | School of Economics Working Papers; 2018-11 | |
| dc.rights | Copyright the authors | |
| dc.source.uri | https://econpapers.repec.org/paper/adlwpaper/2018-11.htm | |
| dc.subject | congestion games; exploration vs exploitation; quantal response equilibrium; impulse balance equilibrium; specification test; experimental economics | |
| dc.title | Exploration vs Exploitation, impulse balance equilibrium and a specification test for the el farol bar problem | |
| dc.type | Working paper | |
| pubs.publication-status | Published |