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A unified approach to comparative statics puzzles in experiments

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  • Schmutzler, Armin

Abstract

The paper shows that several game-theoretic solution concepts provide similar comparative statics predictions over a wide class of games. I start from the observation that, in many experiments, behavior is affected by parameter shifts that leave the Nash equilibrium unchanged. I explain the direction of change with a heuristic structural approach, using properties such as strategic complementarities and increasing differences. I show that the approach is consistent with general comparative statics results for (i) the Nash equilibrium of a game with perturbed payoff functions, (ii) the quantal response equilibrium, (iii) level-k reasoning. I also relate the structural approach to equilibrium selection concepts.

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Bibliographic Info

Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 71 (2011)
Issue (Month): 1 (January)
Pages: 212-223

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Handle: RePEc:eee:gamebe:v:71:y:2011:i:1:p:212-223

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Web page: http://www.elsevier.com/locate/inca/622836

Related research

Keywords: Comparative statics Supermodularity Strategic complementarity Quantal-response equilibrium Level-k reasoning;

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References

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Cited by:
  1. Eichberger, Jürgen & Kelsey, David, 2008. "Are the Treasures of Game Theory Ambiguous?," Sonderforschungsbereich 504 Publications 08-08, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
  2. Topi Miettinen, 2006. "Promises and Conventions - An Approach to Pre-play Agreements," Papers on Strategic Interaction 2006-29, Max Planck Institute of Economics, Strategic Interaction Group.

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