EXPERIMENTAL RESULTS ON THE CENTIPEDE GAME IN NORMAL-FORM - AN INVESTIGATION ON LEARNING

We analyze behavior of an experiment on the centipede game played in t he reduced normal form. In this game two players decide simultaneously when to split a pie which increases over time. The subjects repeat th is game 100 times against randomly chosen opponents. We compare severa l static models and quantitative learning models, among them a quantal response, model reinforcement models and fictitious play. Furthermore , we structure behavior from period to period according to a simple co gnitive process, called learning direction theory. We show that there is a significant difference in behavior from period to period whether a player has decided to split the pie before or after the opponent. (C ) 1998 Academic Press.