Learning and decision costs in one-person games

This paper reports the results of a two-part data analysis of learning in a repeated costly decision experiment. In the first part we test payoff dominance under the hypothesis of expected payoff maximization. We utilize a dynamic probability distribution over decisions for each player, characterizing what each player has learned about the payoff function by the moments from these distributions. In the second part, we test the hypothesis of expected payoff maximization for players in each treatment group. Expected payoff maximization is supported but payoff dominance is not. Copyright © 1999 John Wiley & Sons, Ltd.