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Title: Coordination, "magic", and reinforcement learning in a market entry game
Authors: Erev, Ido
Rapoport, Amnon
Keywords: Coordination
Quick convergence
Market entry games
Reinforcement learning
Issue Date: Oct-1997
Series/Report no.: Marketing Working Paper Series ; MKTG 97.103
Abstract: Previous experimental studies have documented quick convergence to equilibrium play in market entry games with a large number of agents. The present study examines the effect of the available information in a 12-player game in an attempt to account for these findings. In line with the prediction of a simple reinforcement learning model (Roth & Erev, 1995), quick convergence to equilibrium is observed even given minimal information (unknown payoff rule). However, in violation of the basic model, information concerning other players' payoff increases the number of entrants. The information effect can be described by a variant of the basic reinforcement learning model assuming that the additional information changes the player's reference point.
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