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</o:shapelayout></xml><![endif]--></head><body lang=DE link="#0563C1" vlink="#954F72"><div class=WordSection1><p class=MsoNormal><span lang=EN-US style='font-size:12.0pt;font-family:"Times New Roman",serif'>Dear all,<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='font-size:12.0pt;font-family:"Times New Roman",serif'>You are cordially invited to attend the VCEE seminar on <b>Friday, Jun 24 <sup> </sup>from 10:30-12:00</b> (SR 14). <o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='font-size:12.0pt;font-family:"Times New Roman",serif'>Guillaume Frechette (New York University)<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='font-size:12.0pt;font-family:"Times New Roman",serif'><o:p> </o:p></span></p><p class=MsoNormal><span lang=EN-US style='font-size:12.0pt;font-family:"Times New Roman",serif'>Beliefs in Repeated Games</span><span lang=EN-US style='font-size:12.0pt;font-family:"Cambria Math",serif'>∗</span><span lang=EN-US style='font-size:12.0pt;font-family:"Times New Roman",serif'><br><br><o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='font-size:12.0pt;font-family:"Times New Roman",serif'>Abstract<br>This paper uses a laboratory experiment to study beliefs and their relation-<br>ship to action and strategy choices in finitely and indefinitely repeated prison-<br>ers’ dilemma games. We find subjects’ beliefs about the other player’s action<br>are generally accurate despite some small systematic deviations correspond-<br>ing to early pessimism in the indefinitely repeated game and late optimism in<br>the finitely repeated game. The data reveals a close link between beliefs and<br>actions that differs between the two games. In particular, the same history<br>of play is associated with different beliefs, and the same beliefs with different<br>action choices in each game. Moreover, we find beliefs anticipate the evolution<br>of behavior within a supergame, changing in response to the history of play (in<br>both games) and the number of rounds played (in the finitely repeated game).<br>We then use the subjects’ beliefs over actions in each round to identify their<br>beliefs over supergame strategies played by the other player. We find these<br>beliefs correctly capture the different classes of strategies used in each game.<br>Importantly, subjects using different strategies have different beliefs, and for<br>the most part, strategies are subjectively rational given beliefs. The results<br>also suggest subjects tend to underestimate the likelihood that others use less<br>cooperative strategies. In the finitely repeated game, this helps explain the<br>slow unravelling of cooperation. In the indefinitely repeated game, persistence<br>of heterogeneity in beliefs underpins the difficulty of resolving equilibrium se-<br>lection.<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='font-family:"Times New Roman",serif'><o:p> </o:p></span></p><p class=MsoNormal><span lang=EN-US style='font-size:12.0pt;font-family:"Times New Roman",serif'><o:p> </o:p></span></p><p class=MsoNormal><span lang=EN-US style='font-size:12.0pt;font-family:"Times New Roman",serif'><o:p> </o:p></span></p><table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0 width="100%" style='width:100.0%;border-collapse:collapse;border:none'><tr><td style='border:solid #D4DADE 1.0pt;border-right:none;padding:0cm 0cm 0cm 0cm'></td><td width=12 style='width:9.0pt;border:solid #D4DADE 1.0pt;border-left:none;padding:0cm 0cm 0cm 0cm'></td></tr></table><p class=MsoNormal><span class=event-description><span lang=EN-US style='font-size:12.0pt;font-family:"Times New Roman",serif'>I</span></span><span lang=EN-US style='font-size:12.0pt;font-family:"Times New Roman",serif'>f you are interested in <b>meeting Guillaume Frechette </b>after the seminar (meeting slots of 30’ room no 05.330 (Wagner Zimmer) please register via this doodle-link: </span><span class=MsoHyperlink><span lang=EN-US style='font-family:"Times New Roman",serif'><o:p></o:p></span></span></p><p class=MsoNormal><span lang=EN-US style='font-size:12.0pt;font-family:"Times New Roman",serif'><o:p> </o:p></span></p><p class=MsoNormal><span lang=EN-US style='font-size:12.0pt;font-family:"Times New Roman",serif'>https://doodle.com/meeting/participate/id/b2RWgjJb<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='font-size:12.0pt;font-family:"Times New Roman",serif'><o:p> </o:p></span></p><p class=MsoNormal><span lang=EN-US style='font-size:12.0pt;font-family:"Times New Roman",serif'>Best regards,<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='font-size:12.0pt;font-family:"Times New Roman",serif'>Gabriele Prochaska</span><span lang=EN-US style='font-size:12.0pt;font-family:"Times New Roman",serif;mso-fareast-language:DE-AT'><o:p></o:p></span></p><p class=MsoNormal><span style='font-family:"Times New Roman",serif'><o:p> </o:p></span></p></div></body></html>