Strategic Experimentation with Private Payoffs

Arbeitspapier

We consider two players facing identical discrete-time bandit problems with a safe and a risky arm. In any period, the risky arm yields either a success or a failure, and the first success reveals the risky arm to dominate the safe one. When payoffs are public information, the ensuing free-rider problem is so severe that the equilibrium number of experiments is at most one plus the number of experiments that a single agent would perform. When payoffs are private information and players can communicate via cheap talk, the socially optimal symmetric experimentation profile can be supported as a perfect Bayesian equilibrium for sufficiently optimistic prior beliefs. These results generalize to more than two players whenever the success probability per period is not too high. In particular, this is the case when successes occur at the jump times of a Poisson process and the period length is sufficiently small.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: SFB/TR 15 Discussion Paper ; No. 387

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Stochastic and Dynamic Games; Evolutionary Games; Repeated Games ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
• Thema: Strategic Experimentation ; Bayesian Learning ; Cheap Talk ; Two-Armed Bandit ; Information Externality ; Entscheidung bei Risiko ; Informationsverhalten ; Spieltheorie ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Heidhues, Paul ; Rady, Sven ; Strack, Philipp
• Ereignis: Veröffentlichung
• (wer): Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
• (wo): München
• (wann): 2012

Weitere Informationen

• DOI: doi:10.5282/ubm/epub.14041
• Handle: http://hdl.handle.net/10419/93893
• URN: urn:nbn:de:bvb:19-epub-14041-2
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ