An economist's perspective on probability matching

The experimental phenomenon known as 'probability matching' is often offere d as evidence in support of adaptive learning models and against the idea t hat people maximise their expected utility. Recent interest in dynamic-base d equilibrium theories means the term re-appears in Economics. However, the re seems to be conflicting views on what is actually meant by the term and about the validity of the data. The purpose of this paper is therefore threefold: First, to introduce today 's readers to what is meant by probability matching, and in particular to c larify which aspects of this phenomenon challenge the utility-maximisation hypothesis. Second, to familiarise the reader with the different theoretica l approaches to behaviour in such circumstances, and to focus on the differ ences in predictions between these theories in light of recent advances. Th ird, to provide a comprehensive survey of repeated, binary choice experimen ts.