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Deductive versus inductive equilibrium selection: experimental results
2004
Journal of Economic Behavior and Organization
The debate in equilibrium selection appears to have culminated in the formation of two schools of thought: those that favor equilibrium selection based on rational coordination and those that favor zero-rationality adaptation. We examine four deductive selection principles and find that each fails to explain experimental data. We propose an inductive selection principle based on simple learning dynamics. Using out-of-sample maximum likelihood parameters, the predictive performance of one such
doi:10.1016/j.jebo.2002.10.001
fatcat:5mgaqvgborcgli2jeddxyccbva