Rule learning in symmetric normal-form games: Theory and evidence

An experiment, consisting of two 15-period runs with 5 X 5 games, was designed to test Stahl's [International Journal of Came Theory 28, 111-130 (1999)] model of boundedly rational behavioral rules and rule learning for symmetric normal-form games with unique symmetric Nash equilibria. A player begins with initial propensities on a class of evidence-based behavioral rules and, given experience over time, adjusts her propensities in proportion to the past performance of the rules. The experimental data provide significant support for rule learning and heterogeneity characterized by three modes. We also strongly reject "Nash learning" and "Cournot dynamics" in favor of rule learning. Journal of Economic Literatrue Classification Numbers: C72, C90, C51, C52. (C) 2000 Academic Press.