The Strategies Behind Their Actions: A New Method to Infer Repeated-Game Strategies and an Application to Buyer Behavior

We introduce a Bayesian method to infer repeated-game strategies that best describe individuals' observed actions. We apply this method to buyer behavior in posted-offer market experiments. While the strategies of one-quarter of the buyers in our experiments correspond to the game-theoretic prediction of passive price-taking, for three-quarters of the buyers we infer different, non-trivial, repeated-game strategies that condition on time, …