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Abstract for:

Strategic Experimentation - (Now published in 'Econometrica',(March 1999).

Patrick  Bolton,  Christopher  Harris,   1993
Paper No' TE/1993/261:
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Is hard copy/paper copy available? NO - Paper Copy Out Of Print.
This Paper is published under the following series: Theoretical Economics
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This paper extends the classic two-armed bandit problem to a many-agent setting in which N players each face the same experimentation problem. The difference with the single-agent problem is that agents can now learn from the experiments of others. Thus, experiementation produces a public good and a free-rider problem in experimentation naturally arises. More interestingly, future experimentation by others encourages current individual experimentation. The paper provides an analysis of the set of Markov equilibria in terms of the free-rider effect and the encouragement effect.