forthcoming, *Games and Economic Behavior*

Drew Fudenberg and David K. Levine

June 30, 1995

revised: August 13, 1997

* Abstract: *Each period, a player
must choose an action without knowing the outcome that will be chosen by
"Nature," according to an unknown and possibly history-dependent stochastic
rule. We discuss have a class of procedures that assign observations to categories, and
prescribe a simple randomized variation of fictitious play within each category. These
procedures are "conditionally consistent," in the sense of yielding almost as
high a time-average payoff as could be obtained if the player chose knowing the
conditional distributions of actions given categories. Moreover given

Source code for the fictitious play and conditional learning simulations can be downloaded here. These are in the form of Excel 7.0 spreadsheets.