We present a parametric learning model of players' dynamic and possibly outofequilibrium beliefs about other players' preferences that also incorporates random utility (noise). We estimate the model
using the data from the fourcountry ultimatum game experiments of Roth et al. (1991). We find evidence that in the US and in Israel, the estimated beliefs of proposers are stationary and outofequilibrium, that in Slovenia, they are in equilibrium, and that in Japan, they are outofequilibrium, change from period to period and move away from equilibrium over time. In Japan and in the US, the estimated proposers' beliefs are further away from the uniform prior than the
estimated equilibrium beliefs. The results seem to provide support for a nonpecuniary payoff explanation in all countries.
By: Miguel Costa-Gomes, Klaus G. Zauner (Univ. of Vienna)
Published in: RC21934 in 2001
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