The Parasite Game: Exploiting the Abundance of Nature in the Face of Competition

Judith Avrahami, Werner Guth & Yaakov Kareev

A situation in which the regularity in nature can be utilized while competition is to be avoided is modeled by the Parasite game. In this game regular behavior could enhance guessing nature but strategic randomization is required to avoid being outguessed. In an experiment, 60 pairs of participants (partner design) played many rounds of the Parasite game. The treatements differed in nature's probabilities and whether or not these probabilities were announced in advance or oculd only be experienced over time. Before playing, the working memory (WM) of participants was measured. Data analyses test the correspondence of participants' behavior to game-theoretic benchmarks and the effect of participants' WM on their behavior.

June, 2001
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Published as "Games of Competition in a Stochastic Environment", Theory and Decision 59 (2005), 255-294