Belief formation in a signaling game without common prior: an experiment

Possajennikov, Alex (2017) Belief formation in a signaling game without common prior: an experiment. Theory and Decision . ISSN 1573-7187

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Abstract

Using belief elicitation, the paper investigates the process of belief formation and evolution in a signaling game in which a common prior is not induced. Both prior and posterior beliefs of Receivers about Senders' types are elicited, as well as beliefs of Senders about Receivers' strategies. In the experiment, subjects often start with

diffuse uniform beliefs and update them in view of observations. However, the speed of updating is influenced by the strength of initial beliefs. An interesting result is that beliefs about the prior distribution of types are updated slower than posterior beliefs, which incorporate Senders' strategies. In the medium run, for some specifications of game parameters, this leads to outcomes being significantly different from the outcomes of the game in which a common prior is induced. It is also shown that elicitation of beliefs does not considerably change the pattern of play in this game.

Item Type: Article
Additional Information: The final publication is available at Springer via http://dx.doi.org/10.1007/s11238-017-9614-z
Keywords: Beliefs, Signaling, Experiment, Learning, Belief elicitation
Schools/Departments: University of Nottingham, UK > Faculty of Social Sciences > School of Economics
Identification Number: 10.1007/s11238-017-9614-z
Depositing User: Possajennikov, Dr Alex
Date Deposited: 28 Jun 2017 09:34
Last Modified: 20 Oct 2017 20:05
URI: http://eprints.nottingham.ac.uk/id/eprint/43782

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