Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/49676 
Year of Publication: 
2009
Series/Report no.: 
CeDEx Discussion Paper Series No. 2009-08
Publisher: 
The University of Nottingham, Centre for Decision Research and Experimental Economics (CeDEx), Nottingham
Abstract: 
The common prior assumption is pervasive in game-theoretic models with incomplete information. This paper investigates experimentally the importance of inducing a common prior in a two-person signaling game. For a specific probability distribution of the sender's type, the long-run behavior without an induced common prior is shown to be different from the behavior when a common prior is induced, while for other distributions behavior is similar under both regimes. We also present a learning model that allows players to learn about the other players' strategies and the prior distribution of the sender's type. We show that this learning model accurately accounts for all main features of the data.
Subjects: 
common prior
signaling
experiment
learning
JEL: 
C72
C92
D83
Document Type: 
Working Paper

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