BoundedRationality_TheAdaptiveToolbox.pdf

12
Simple Reinforcement Learning
Models and Reciprocation in the
Prisoner's Dilemma Game
Ido Erev 1 and Alvin E. Roth 2
faculty of Industrial Engineering and Management, Technion, Haifa 3200, Israel
Dept. of Economics, and Harvard Business School, Harvard University,
Cambridge, MA 02138, U.S.A.
ABSTRACT
The observation that subjects can learn to cooperate in repeated prisoner's dilemma
games suggests that human players are more sophisticated and/or less self-interested than
the predictions of simple adaptive learning models proposed in recent research. The
present chapter demonstrates that this phenomenon is consistent with simple
reinforcement learning, when learning is over a strategy set that includes a repeated game
strategy that allows reciprocation to be learned. A three-parameter model that quantifies
this assumption was found to outperform alternative models in predicting the results of
the three experiments conducted by Amnon Rapoport and Mowshowitz (1966).
INTRODUCTION
Experimental study of the effect of experience on choice behavior typically reveals
a slow adaptive adjustment process. If one of the possible alternatives
yields higher return, decision makers slowly learn to prefer it. Recent research
(e.g., Roth and Erev 1995; Erev and Roth 1998b; Rapoport et al. 1998; Cheung
and Friedman 1999; Tang 1996; Camerer and Ho 1999; Mookerjee and Sopher
1997; Sarin and Vahid 1998; Daniel etal. 1998) demonstrates that this common