Learning and Belief Elicitation: Observer Effects

Abstract

This paper asks a simple methodological question about belief elicitation: Does asking subjects about their beliefs during a repeated game change the way subjects play the game? In particular, we ask if belief elicitation changes behavior in the direction of belief based learning models, away from reinforcement learning models. Based on a carefully designed laboratory experiment, we show that play is indeed affected by eliciting players beliefs. More importantly, however, the effect is not simply a parametric shift in favor of one or another theory. What we instead observe is that subjects behave as if they construct mental models of their opponents that are both more sophisticated and robust in the presence of belief elicitation. Finally we show that game theoretically motivated learning models fit the behavioral data much better when the action data is generated jointly with belief elicitation than when it is generated without. This supports the conjecture that eliciting beliefs make subjects behave in a more game theoretic manner. Our findings have serious implications both for the choice of econometric models when testing game theoretic and learning models, and for the ability to test these models based on stated, rather than empirical beliefs

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Cite this paper

@inproceedings{Rutstrm2004LearningAB, title={Learning and Belief Elicitation: Observer Effects}, author={Elisabet Rutstr{\"{o}m and Nathaniel T. Wilcox and Nick Feltovich and Glenn W. Harrison and Teck-hua Ho and Chris Murray and Jack Ochs}, year={2004} }