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Sophisticated EWA Learning and Strategic Teaching in Repeated Games

Camerer, Colin F. and Ho, Teck-Hua and Chong, Juin-Kuan (2001) Sophisticated EWA Learning and Strategic Teaching in Repeated Games. Social Science Working Paper, 1087R. California Institute of Technology , Pasadena, CA. (Unpublished)

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Most learning models assume players are adaptive (i.e., they respond only to their own previous experience and ignore others' payoff information) and behavior is not sensitive to the way in which players are matched. Empirical evidence suggests otherwise. In this paper, we extend our adaptive experience-weighted attraction (EWA) learning model to capture sophisticated learning and strategic teaching in repeated games. The generalized model assumes there is a mixture of adaptive learners and sophisticated players. An adaptive learner adjusts his behavior the EWA way. A sophisticated player rationally best-responds to her forecasts of all other behaviors. A sophisticated player can be either myopic or farsighted. A farsighted player develops multiple-period rather than single-period forecasts of others' behaviors and chooses to "teach" the other players by choosing a strategy scenario that gives her the highest discounted net present value. We estimate the model using data from p-beauty contests and repeated trust games with incomplete information. The generalized model is better than the adaptive EWA model in describing and predicting behavior. Including teaching also allows an empirical learning-based approach to reputation formation which predicts better than a quantal-response extension of the standard type-based approach.

Item Type:Report or Paper (Working Paper)
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URLURL TypeDescription ItemPublished Version
Camerer, Colin F.0000-0003-4049-1871
Ho, Teck-Hua0000-0001-5210-4977
Chong, Juin-Kuan0000-0002-5187-8652
Additional Information:Revised version. Original dated to April 2000. This research was supported by NSF grants SBR-9730364 and SBR-9730187. Many thanks to Vince Crawford, Drew Fudenberg, David Hsia, John Kagel, and Xin Wang for discussions and help. Helpful comments were also received from seminar participants at Berkeley, Caltech, Harvard, Hong Kong UST, and Wharton. Published as Colin F. Camerer, Teck-Hua Ho, Juin-Kuan Chong, Sophisticated Experience-Weighted Attraction Learning and Strategic Teaching in Repeated Games, Journal of Economic Theory, Volume 104, Issue 1, 2002, Pages 137-188,
Group:Social Science Working Papers
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Series Name:Social Science Working Paper
Issue or Number:1087R
Record Number:CaltechAUTHORS:20170808-151402454
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:79965
Deposited By: Jacquelyn Bussone
Deposited On:09 Aug 2017 18:11
Last Modified:03 Oct 2019 18:26

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