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  • Thumbnail for The effect of overconfidence on sequential decision making : an experimental investigation of the classical secretary problem
    The effect of overconfidence on sequential decision making : an experimental investigation of the classical secretary problem by Hoffman, Kate

    This experimental economics thesis uses the Classical Secretary Problem (CSP) to simulate a sequential observation and selection problem in the context of employer hiring decisions. The CSP is paired with an overconfidence test to examine whether there is a relationship between a subject’s level of overconfidence and his or her success in making optimal hiring decisions. No significant differences were found between subjects with varying overconfidence levels, but significant deviation was found between subjects’ behaviors and the selections dictated by the optimal policy. Significant learning among all subjects was also discovered between the first and second half of the CSP, indicating a tendency among subjects to revise strategies and correct mistakes.

  • Thumbnail for Experimental findings and adaptive learning in a five-player Centipede game
    Experimental findings and adaptive learning in a five-player Centipede game by Nachbar, Gavin

    In previous two-player experimental versions of the centipede game, the theoretically rational outcome has proven highly paradoxical. In this paper, I report on the findings of an experimental five player, high pay centipede game in a finite-repeated context over 60 rounds. The results show that additional players, and subsequently additional counterfactual conditions, do not necessarily lead to an increase in the Nash-equilibrium outcome. In the five player game, a large portion of the population were found to act as consistent cooperators, which had major effects on other subjects. Using a model of adaptive learning, previous game outcomes are shown to influence play over time. The significance of a lagged-historical based model at the first three decision nodes suggests a large amount of learning within the sessions. The combination of this adaptive play with cooperative types results in a significantly smaller move to Nash than found in an equivalent three player experimental treatment.